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U.S.  FEDERAL  TRADE 
COAAMISSION 

REPORT  OF  THE  EDERAL 
TRADE  COMMISSION  ON 
A/ETHODS  AND  OPERATIONS 
OF  GRAIN  EXPORTERS 


THE  LIBRARY 
OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


REPORT 


OF  THE 


FEDERAL  TRADE  COMMISSION 


ON 


METHODS  AND  OPERATIONS  OF 

GRAIN  EXPORTERS 


VOL.  I 
INTERRELATIONS  AND  PROFITS 


May  16,  1922 


1-3  ms 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1922 


REPORT 


OF  THE 


FEDERAL  TRADE  COMMISSION 


ON 


METHODS  AND  OPERATIONS  OF 


GRAIN  EXPORTERS 


VOL.  I 
INTERRELATIONS  AND  PROFITS 


May  16,  1922 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1922 


FEDERAL  TRADE  COMMISSION. 


Nelson  B.  Gaskill,  Chairman. 

A'^ICTOK  aiURDOCK. 

John  F.  Nugent. 
Huston  Thompson. 

J.  P.  YoDEK,  Secretary, 


ADDITIONAL   COPIES 

OF  THIS  PUBUCATION  MAT  BE  PROCURED  FROM 

THE  SUPERINTENDENT  OF  DOCUMENTS 

GOVERNMENT  PRINTING  OFFICE 

WASHINGTON,   D.   C. 

AT 

15  CENTS  PER  COPY 


V 


CONTENTS. 


Page 

Acknowledgment XI 

Letter  of  submittal XIII 

Summary XIX 

Origin  and  scope XIX 

Production  of  principal  grains XIX 

Importance  of  grain  exports XX 

European  governmental  control XXI 

Nature  of  export  business XXII 

Importance  of  foreign  interests XXIII 

Control  and  interrelations XXIII 

Proportion  of  export  business  examined XXIV 

Rate  of  profit XXIV 

Frequency  of  turnover XXV 

Margin  of  profit  per  bushel XXVI 

The  United  States  Grain  Corporation XXVIII 

Chapter  I.— Okigin  and  Scope  of  the  Inquiry. 

Sec.  1.  Origin  of  the  inquiry 1 

2.  Scope  of  the  inquiry 2 

3.  Sources  of  information 2 

Chapter  II. — Production  and  Exports. 

Sec.  1.  World  supply  of  wheat 3 

Production  of  principal  countries 3 

Demand  for  wheat  and  wheat  flour 4 

2.  World  supply  of  rye 5 

Production  of  principal  countries 5 

Demand  for  rye 6 

3.  World  supply  of  barley 7 

Production  of  principal  countries '. 7 

Demand  for  barley 8 

4.  World  supply  of  oats 9 

Production  of  principal  countries 9 

Demand  for  oats 10 

5.  World  supply  of  corn H 

Production  of  principal  countries 11 

Demand  for  corn 52 

6.  Importance  of  grain  exports 13 

Importance  in  foreign  trade 13 

Exports  of  principal  grains 14 

7.  Exports  from  the  principal  ports 15 

8.  Proportion  of  grain  exported 17 

9.  Grades  and  kinds  of  wheat  exported 17 

Export   grades 17 

Kinds  of  wheat  exported IS 

Chapter  III. — European  Government  Control. 

Sec.  1.  The  Allies'  war  control 20 

The  Royal  Commission  on  Wheat  Supplies 20 

Overseas  organization 21 

The  wheat  executive  agreement J_  22 

m 


3081S75 


IV  CONTENTS. 

Page. 

Sec.  2.  Decontrol   in   Europe 22 

United   Kingdom 22 

France 24 

Italy 2r, 

Belgium 2(5 

Korway 27 

Spain 27 

Rumania 27 

Germany 28 

Chapter  IV.— Export  Business  and  Methods  of  Foreign  Buyers. 

Sec.  1.  General  characteristics  of  the  export  grain  business 29 

Grain  exporting  a  complex  business ._  29 

Grain  transportation  and  handling 29 

Orders   and   settlement 29 

2.  American  branches  of  foreign  houses HO 

3.  Operations  of  United  States  branches  of  foreign  concerns 31 

Supervision  of  branch  ofiices .    .  .'U 

Origin  of  orders 31 

Handling  orders  by  United  States  branch  ollices 32 

Hedging  and  futures  transactions 34 

Terms  of  purchase .3.5 

Steamer   space 36 

Exchange . .37 

Stocks  of  grain .__  .37 

4.  Handling  grain  abroad .38 

Facilities  for  handling .38 

Financing  foreign  buyers .39 

Combinations  among  foreign  buyers 39 

Chapter  V. — Control  and  Interrelations  ob'. Grain  Exporters. 

Sec.  1.  Form  of  organization  of  the  grain  exporting  company 41 

2.  Grain  exporting  companies  in  order  of  1921  volume  of  exported 

wheat 41 

3.  Control  and  interrelations  of  the  principal  grain  exporting  firms__  43 

Samuel  Sanday  &  Co 43 

Louis  Dreyfus  &  Co 43 

P.  N.  Gray  .<t  Co.  (Inc.) 44 

Gray-Eosenbaum  Grain  Co 44 

The  J.  Rosenbaum  Grain  Co 44 

The  Chesapeake  Export  Co.    (Inc.)_ 45 

The  Peoples  Industrial  Trading  Corporation 45 

Armour  Grain  Co 45 

The  Barnes-Ames  Co.  subsidiaries  and  affiliated  companies__  46 

The  Barnes-Ames  Co 46 

The  Barnes-Irwin  Co.    (Inc.) 48 

The  Barnes-Jackson  Co.    (Inc.) 46 

The  Barnes-Piazzek  Co.    (Inc.) 46 

The  Itasca  Elevator  Co 47 

The  Neal  Grain  Co 47 

Smyth,  Barnes  &  Co.  (Ltd.) 47 

The  Zenith  Grain  Co.  (Ltd.) 47 

The  Nye  &  Jenks  Grain  Co 47 

The  Nye  &  Jenks  Grain  Co.  (Chicago) 47 

Hansen  Produce  Co.   (Inc.) 47 

Kerr,  GifCord  &  Co.  (Inc.) 4S 

C.  F.  &  G.  W.  Eddy  (Inc.) 48 

The  Grain  Growers  Export  Co.  (Inc.) 48 

The  Meladv  Grain  Co 48 

Wm.  H.  Muller  &  Co.  (Inc.) 48 

The  Norris  grain  companies 48 

The  Norris  Grain  Co.  (Chicago) 48 

The  Norris  Grain  Co.   (New  York) 49 

The  Norris  Grain  Co.  (Kansas  City,  Mo.) 49 


CONTENTS.  V 

Sec.  3.  Control  and  interrelations,  etc. — Continxied.  Pase- 

The  Northern  Grain  &  Warehouse  Co 49 

E.  A.  Strauss  &  Co.  (Inc.) 49 

C.  B.  Fox  Co.  (Inc.) 49 

Albert  C.  Field  (Inc.) 50 

Power,   Son  &  Co 50 

Balfour,  Guthrie  &  Co 50 

The  Hall-Baker  grain  companies 50 

The  Hall-Baker  Grain  Co.  (Kansas  City,  Mo.) 50 

The  Hall-Baker  Grain  Co.  (New  York) 50 

The  M.  H.  Houser  grain  companies 51 

The  Pacific  Grain  Co 51 

The  Portland  Flouring  Mills  Co 51 

Milmine,  Bodman  &  Co.  (Inc.) 51 

Webb  &  Kenward   (Inc.) 51 

The  Commercial  Union  of  America  (Inc.) 52 

John  T.  Fahey  &  Co 52 

The  Donalme-Stratton  Co 52 

Schilthuis  American  Trading  Co 52 

Suzuki  &  Co 53 

Mitsui  &  Co.   (Ltd.) 53 

The  Blake-Dobbs  Co.    (Inc.) 53 

The  Langenberg  grain  companies 53 

The  Langenberg  Hay  &  Grain  Co 53 

The  Langenberg  Brothers  Grain  Co 53 

The  Updike  Grain  Co 53 

Jas.  Carrutbers  &  Co.  (Inc.) 54 

Mitsubishi  Shoji  Kaisha   (Ltd.) 54 

The  Cooperative  Wholesale  Society  (Ltd.) 54 

Paul,  Robson  &  Co 54 

The  Wheat  Export  Co.  (Inc.) 54 

4.  Foreign  connections  with  principal  American  exporters 55 

Foreign  partnerships  witli  American  grain  exporting  branches  55 

Foreign  holdings  in  principal  American  grain  exporting  cor- 
porations   55 

Foreign  grain  companies   subsidiary   to  principal   American 

grain  exporting  companies 56 

Foreign  corporations  with  American  exporting  branches 56 

5.  Summarization 56 

6.  Control  and  interrelation  of  the  principal  fobbers  of  export  grain_  59 

Wallingford   Bros 59 

Simouds-Shields-Lonsdale  Grain  Co 59 

Frisco  Elevators  Co 59 

The  Moore-Lawless  Grain  Co 59 

The  Fort  Worth  Elevators  Co 60 

Rosenbaum  Bros 60 

Federal  Grain  Co 60 

Trans-Mississippi  Grain  Co 60 

Bartlett-Frazier   Co 60 

Marshall  Hall  Grain  Co 61 

The  J.  W.  Craig  Grain  Co . 61 

E.  F.  Newing 61 

Fuller  Grain  Co 61 

The  Wilcox-Hayes  Co 61 

Great  West  Mill  &  Elevator  Co 61 

Edward  R.  Bacon  Grain  Co 61 

Tavlor  &  Bournique  Co 62 

J.  C.  Shaffer  Grain  Co 62 

F.  S.  Lewis  &  Co 62 

Chapter  VI.— Investment  and  Earnings. 

Sec.  1.  Source  of  information 63 

2.  Condition  of  accounting  records 03 

General   condition 63 

Qunntities  of  grain  handled 64 

The  cost  of  grain 64 


VI  CONTENTS. 

Pace. 

Sec.  3.  Nature  of  export  business 65 

4.  Proportion  of  exports  presented 65 

5.  Metliod  of  computing  investment  and  earnings 66 

Investment  in  grain  business 66 

Earnings  from  grain  business 66 

Earnings  by  grains 67 

6.  Investment  in  the  export  grain  business 68 

Importance  of  borrowed  funds 68 

Monthly  fluctuation  of  loans 68 

7.  Earnings  for  exporters  and  fobbers 69 

Total  earnings 69 

Earnings  for  exporters 70 

Earnings  for  fobbers 70 

8.  Rates  of  earnings  for  exporters  and  fobbers 70 

Rates  of  earnings  for  exporters 71 

Rates  of  earnings  for  fobbers 71 

American  branches  of  foreign  houses 72 

Rates  of  earnings  for  exporters  by  companies 72 

Rates  of  earnings  for  fobbers  by  companies 74 

9.  Earnings  from  the  export  grain  business 75 

Total   earnings   by   grains 75 

Total  earnings  for  exporters 76 

Total  earnings  for  fobbers 78 

10.  Net  profit  per  bushel  by  grains 79 

Net  profit  on  wheat  for  exporters 79 

Net  profit  on  wheat  for  fobbers 81 

Net  profit  on  rye  for  exporters S2 

Net  profit  on  rye  for  fobbers 83 

Net  profit  on  barley  for  exporters , 84 

Net  profit  on  barley  for  foblters 86 

Net  profit  on  oats  for  exporters 87 

Net  profit  on  oats  for  fobbers 88 

Net  profit  on  corn  for  exporters 89 

Net  profit  on  corn  for  fobbers 90 

11.  Frequency  and  rate  of  return  on  turnover 92 

Chapter  VII. — The  United  States  Grain  Corporation. 

Sec.  1.  Relations  of  Grain  Corporation  to  the  inquiry 93 

2.  Conditions  prior  to  organization 93 

3.  Government  price  control . 94 

United  States  Food  Administration 94 

Guaranteed  wheat  prices 95 

Fair  price  for  the  1917  wheat  crop 96 

Guaranteed  price  for  the  1918  wheat  crop ._  97 

Guaranteed  price  for  the  1919  wheat  crop 98 

Zones  and  agencies 99 

4.  Organization  and  capitalization 100 

Organization  of  Grain  Corporation 100 

Capitalization  of  Grain   Corporation 101 

5.  Extent  and  magnitude  of  operations 101 

Purchases   and   sales 101 

Wheat  and  wheat  flour 102 

Purchase  and  sale  of  wheat 102 

Wheat  sold  for  export 103 

Country  elevator   agreements 104 

Elevators'   license 104 

European  relief  appropriation 105 

Russian  relief  fund 105 

Purchase  and  sale  of  wheat  flour 105 

Millers'  voluntary  agreement 106 

Millers'  license 107 

6.  Financial  statements,  earnings,  and  margins 107 

Balance  sheets 107 

Fluctuations  in  borrowed  funds 108 


CONTENTS.  ,      Vll 

Sec.  6.  Financial  statements,  earnings  and  margins — Continued.  Page. 

Income  statements 109 

Rate  of  earnings  on  investment 110 

Earnings  on  products  sold 111 

7.  Margins  on  grain  sold 113 

LIST  OF  TABLES. 

1.  Estimated  world's  production  of  wheat  and  the  quantity  and  propor- 

tion produced  by  the  United  States  and  Canada,  1910-1921 3 

2.  Quantity  of  wheat  and  the  wheat  equivalent  of  wheat  flour  imported 

by  the  principal  importing  countries,  1910-1919 5 

3.  Estimated  world's  production  of  rye  and  the  quantity  and  proportion 

produced  by  the  United  States,  1910-1921 6 

4.  Quantity    of    rye    imported    by    the    principal    importing    countries, 

1911-1918 7 

5.  Estimated  world's  production  of  barley  and  the  quantity  and  propor- 

tion produced  by  the  United  States,  1910-1921 8 

6.  C.Uiantitv   of  barley  imported   by  the  principal  importing  countries, 

1911-1918 9 

7.  Esiimated  world's  production  of  oats  and  the  quantity  and  propor- 

tion produced  by  the  United  States,  1910-1921 9 

8.  Q'lantitv    of    oats    imported    by    the    principal    importing   countries, 

1911-1918 10 

9.  Estimated  world's  production  of  corn  and  the  quantity  and  proportion 

produced  by  the  United  States,  1910-1921 11 

10.  Quantitv    of   corn    imported    by    the   principal    importing  countries, 

1910-1919 12 

11.  Total  value  of  domestic  exports  and  of  breadstuft's,  with  index  num- 

bers based  on  1910  as  100.  and  the  proportion  of  domestic  exports 
supplied  by  breadsttiffs,  1910-1921 13 

12.  Net  exports  of  grain  and  products  thereof,  from  the  United  States, 

1910-1921 14 

13.  Proportion  of  United  States  net  exports  to  estimated  production,  for 

the  five  principal  grains,  1910-1921 17 

14.  Domestic  exports  of  wheat  from  the  United  States,  by  grades,  July  1, 

1920.  to  December  31,  1921 IS 

15.  Domestic  exports  of  wheat  from  the  United  States,  by  kinds,  July  1, 

1920.  to  December  31.  1921 18 

IG.  Quantity  of  wheat  exported  from  the  United   States  by  American 

branches  of  foreign  concerns  in  1921 30 

17.  Companies  whose  exportation  of  wheat  in  1921  amounted  for  each 
company,  Avith  sul3Sidiaries,  to  more  than  1,000,000  bushels,  with 

quantities  exported  and  percentages  of  total  exported 42 

IS.  Principal  grain-exporting  companies,  American  owned  to  the  extent 
of  no  per  cent  or  more  of  their  capital  stock,  with  quantities  of 
wheat  exported  in  1921  and  percentages  of  total  exported 57 

19.  Pi-incipal  grain-exporting  companies,  foreign  owned  to  the  extent  of 

50  per  cent  or  more  of  their  capital  stock,  with  quantities  of  wheat 
exported  in  1921  and  percentages  of  total  exported 58 

20.  (Quantity  of  the  principal  grains  exported  or  fobbed  by  companies  ex- 

amined by  the  commission  in  their  business  years  ending  1920  and 

1921 65 

21.  Coml)ined  capital  stock,  surplus,  reserves,  and  average  monthly  loans, 

for  exporters  and  fobbers.  1920  and  1921 G8 

22.  Monthly  fluctuation  in  amount  of  bills  payable  for  15  grain-exporting 

companies,  July,  1920,  to  June,  1921 09 

23.  Earnings  for  grain  exporters  and  fobbers,  1920  and  1921 69 

24.  Rates  of  earnings  for  grain  exporters  and  fobl)ers,  on  the  stockhnlder.s' 

investment  and  on  the  total  funds  employed  in  the  grain  business, 
including  and  excluding  futures.  1920  and  1921 70 

25.  Quantity  and  cost  of  grain  exported  by  five  American  branches  of 

foreign  companies,  1920  and  1921 72 

20   Rates  of  earnings  of  grain  exporters,  by  companies.  1920  and  1921__  73 

27.  R:ites  of  earnings  of  grain  fobbers,  by  companies.  1920  and  1921 74 

28.  Earninus  for  srain   exporters  as   computed   by   the  commission,   by 

grains,  1920  and  1921 70 


VI 11  CONTENTS. 

I'age. 

29.  Earriini,'S  for  grain  fobbers  as  computed  by  the  commission,  by  grains, 

1020  and  1921 78 

30.  Salfis  realization,  cost  of  sales,  and  net  profit  per  bushel  for  wheat 

exported,  by  companies,  1920  and  1921 80 

31.  Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  wheat 

fobbed,  by  companies,  1920  and  1921 ; 81 

32.  Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  rye  ex- 

ported, by  companies,  1920  and  1921 82 

38.  Sales   realization,  cost  of  sales,   and   net  profit  per  bushel   for  rye 

fobbed,  by  companies,  1920  and   1021 84 

34.  Sales  realization,  cost  of  sales,  and  net  profit  per  bushel,  for  barley 

exported,  by  companies,  1920  and  1921 85 

35.  Sales  realization,  cost  of  sales,  and  net  profit  per  bushel,  for  barley 

fobbed,  by  companies,  1920  and  1921 86 

36.  Sales  realization,  cost  of  sales,   and  net  profit  per  bushel  for  oats 

exported,  by  companies,  1920  and  1921 87 

37.  Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  oats 

fobbed,  by  companies,  1920  and  1921 88 

38.  Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  corn  ex- 

ported, by  companies,  1920  and  1921 89 

39.  Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  corn 

fobbed,  by  companies,  1920  and  1921 91 

40.  Prices  established  by  the  Government  for  No.  1  wheat  per  bushel, 

Chicago  basis,  by  kinds,  for  the  1917  crop 96 

41.  Differential  in  cents  per  bushel  between  the  market  prices  at  im- 

portant interior  terminal  and  seaport  markets  for  the  1917  wheat 

crop    96 

42.  Prices  of  wheat  guaranteed  by  the  Government  for  the  1918  crop 97 

43.  Prices  of  wheat  guaranteed  by  the  Government,  by  principal  markets, 

effective  July  1.  1918 98 

44.  Prices  of  wheat  guaranteed  by  the  Government  at  the  principal  in- 

terior and  seaboard  markets  for  the  1919  crop 99 

4.5.  Location  of  offices  and  territory  Included  in  the  zones  of  the  Food 

Administration  Grain   Corporation 99 

46.  Sales  of  barley,  corn,  oats,  and  rye  by  the  coarse  grain  department 

of  the  United  States  Grain  Corporation,  1918  and  1919 102 

47.  Quantity  and  value  of  wheat  sold  by  the  United  States  Grain  Cor- 

portation  for  export,  July,  1918,  to  September,  1920 103 

48.  Quantity   of   wheat   flour   sold   by    the   Food   Administration    Grain 

Corporation  and   the  United   States  Grain   Corporation   by  fiscal 
years  ending  June  30,  1918-1920 105 

49.  Quantity  and  net-sales  value  of  flour  sold  by  the  flour  department 

of  the  Grain  Corporation,  July  1,  1918  to  July  31.  1920 106 

50.  Balance  sheets  of  the  United  States  Grain  Corporation 108 

51.  Monthly  fluctuations  in  the  amount  of  bills  payable  for  the  Grain 

Corporation,  July,  1918  to  June.  1919 109 

52.  Earnings   from    the    operations    of   the    Food    Administration    Grain 

Corporation   and   the  United    States   Grain   Corporation,    Septem- 
ber 1.  1917  to  February  28,  1921 110 

53.  Investment,  earnings,  and  rate  of  earnings  on  investment  for  the  two 

fiscal  years  ending  June  30,  1919  and  1920 110 

54.  Gross   earnings,   expenses,   net   earnings,   and   other   income   for   the 

Grain  Corporation,  September  1,  1917,  to  February  28,  1921 111 

55.  Quantity,  net  earnings,  and  margin   per  bushel  for  the  Grain  Cor- 

poration, by  grains,  September  1,  1917,  to  February  28,  1921 113 

APPENDIX  TABLES. 

1.  Elstimated  world  production  of  wheat,  by  principal  producing  coun- 

tries,  1910-1921 115 

2.  Estimated  world  production  of  rye,  by  principal  producing  countries, 

1910-1921 116 

3.  Estimated  world  production  of  barley,  by  principal  producing  coun- 

tries, 1910-1921 116 

4.  Estimated  world  production   of  oats,  by   principal  producing  coun- 

tries. 1910-1921 117 


CONTENTS.  IX 

Page. 

5.  Estimated  world   production  of  corn,   by  principal   producing  coun- 

tries. 1910-1921 lis 

6.  Exports,  imports,  and  net  exports  of  wheat  and  wheat  flour,  for  the 

States,  calendar  years,  1910-1921 US 

7.  Exports  of  barley  and  rye.  including  the  flour  of  each,  for  the  United 

States,  calendar  years  1910-1921 ^ 119 

8.  Exports,  imports,  and  net  exports  of  oats,  including  oatmeal  and  rolled 

oats,  for  the  United  States,  calendar  years,  1910-1921 119 

9.  Inipoits.  exports,  and  net  exports  of  corn,  including  corn  meal,  for  the 

United  States,  calendar  years,  1910-1921 119 

10.  Domestic  exports  of  principal  grains,  by  important  ports  or  customs 

districts,  calendar  years,  1919-1921 120 

11.  Exports  of  wheat  by  kinds  and  principal  ports  of  shipment,  in  six- 

month  periods,  July,  1920,  to  December,  1921 121 

12.  Estimated  production   of  wheat,  corn,   oats,  barley,   rye,  and  buck- 

wheat in  the  United  States,  calendar  years  1910-1921 123 


ACKNOWLEDGMENT. 


For  the  conduct  of  this  part  of  the  inquiry  and  the  preparation  of 
the  report  thereon  the  commission  wishes  to  make  special  acknowl- 
edgment of  the  services  of  Mr.  W.  H.  England;  Messrs.  George  A. 
Stephens,  Anderson  H.  Tackett,  Byron  Phelps  Parry,  Francis  L. 
Hawes,  Walter  M.  Twombly,  C.  F.  Napier,  jr.,  LeClaire  Hoover,  and 
C.  (Jr.  Farwell  also  rendered  valuable  service. 

The  commission  is  also  indebted  to  the  officials  of  the  United  States 
Grain  Corporation  and  of  the  Bureau  of  Markets  of  the  United 
States  Department  of  Agriculture  for  information  concerning  the 
grain  export  business. 

XI 


LETTER  OF  SUBMITTAL. 


Federal  Trade  Commission, 

Washington,  May  16,  1922. 
To  the  President  of  the  Senate. 

Sir  :  The  Federal  Trade  Commission  submits  herewith  Vohime  I 
of  a  rejDort  on  the  Methods  and  Operations  of  Grain  Exporters,  pur- 
suant to  Senate  Eesohition  133,  Sixty-seventh  Congress,  second 
session. 

This  vohime  deals  with  interrelations  and  profits  of  grain  export- 
ers in  19iiO  and  1921,  while  the  next  volume,  which  is  in  course  of 
preparation,  will  discuss  prices  and  conditions  of  competition.  Ex- 
ports of  grain  from  the  United  States  include  some  Canadian  grain 
which  can  not  be  separated  from  the  domestic  exports  for  some 
companies.  For  the  companies  whose  profits  were  ascertained  the 
results  are  presented  for  their  business  years  which  ended,  in  most 
cases,  in  June  or  December.  Profits  are  shown  both  including  and 
excluding  gains  or  losses  from  transactions  in  futures.  These  trans- 
actions were  generally  hedges  employed  to  reduce  the  business  risks 
but  apparently  to  some  extent  they  were  purely  speculative  ventures. 
Futures  trading  in  wheat,  which  was  suspended  during  the  war.  was 
not  resumed  until  Jul}^  15.  1920;  consequently  the  results  for  com- 
panies closing  their  business  year  June  30,  1920,  showed  no  futures 
trading  in  wheat. 

Profits  were  ascertained  for  most  of  the  large  exporting  compa- 
nies, excepting  those  located  on  the  Pacific  coast  and  in  Baltimore, 
and  for  the  bulk  of  the  export  grain  trade.  The  Pacific  coast  com- 
panies were  omitted  in  order  to  make  an  earlier  report,  while  the 
Baltimore  companies,  on  advice  of  counsel,  refused  access  to  their 
books  and  records.  The  commission  is  now  taking  legal  steps  to  se- 
cure access  to  the  books  and  records  of  the  Baltimore  companies. 

The  outstanding  facts  presented  in  this  volume  may  be  concisely 
stated  as  follows : 

(1)  The  business  of  export  concerns  whose  records  were  examined 
was  not  homogeneous,  and  there  were  marked  differences  in  the  field 
of  operations  of  different  companies.  The  purchases  of  some  domes- 
tic exporters  were  largely  made  directly  from  country  elevators  or 
from  the  producer,  while  others  made  the  bulk  of  their  purchases 
f.  o.  b.  (free  on  board)  vessel  at  Atlantic  or  Gulf  seaboard.  The 
sales  of  these  concerns  were  usually  made  for  delivery  to  the  foreign 
purchaser  at  the  foreign  port  of  destination.  Another  important 
group  comprised  the  so-called  "  fobbers,"  who  purchased  grain  in  the 
interior  for  the  purpose  of  selling  to  exporters  f.  o.  b.  vessel  at  sea- 
board. Some  companies  did  a  mixed  "  fobbing  "  and  exporting  busi- 
ness; they  are  grouped  here  according  to  the  predominant  character 


XIV  LETTER  OF   SUBMITTAL, 

of  their  trade,  and  the  profits  shown  are  those  for  the  entire  ^rain 
business.  The  purchases  of  foreign  concerns  Avith  branches  in  this 
country  were  usually  made  f.  o.  b.  vessel  at  seaboard,  w^hile  their 
sales  w^ere  made  directl}^  to  the  consumer  in  foreign  countries. 

(2)  The  bulk  of  the  grain  exported  from  the  United  States  is  handled 
by  a  comparatively  small  number  of  firms.  In  1921,  for  example, 
eight  concerns  exported  about  50  per  cent  of  the  total  of  345.000,000 
busli^ls  of  domestic  and  Canadian  wheat  exported  from  the  United 
States,  and  36  companies  shipped  over  85  per  cent  of  that  total. 
Wheat  in  this  year  constituted  about  60  per  cent  of  the  total  quantity 
of  domestic  exports  of  all  grains. 

(3)  A  large  proportion  of  the  grain  exported  from  the  United 
States  in  1920  and  1921  was  handled  by  foreign  houses  with  branches 
in  this  country  and  by  American  concerns  wholly  or  partly  foreign 
owned.  For  example,  in  1921  two  foreign  concerns  with  branches 
in  this  countrv  exported  slightly  more  than  one-fourth  of  all  the 
domestic  and  Canadian  wheat  shipped  from  the  United  States  ports, 
wdiile  14  concerns  owned  or  controlled  b}'  foreign  investors  exported 
over  38  per  cent  of  that  total. 

(4)  There  were  three  especially  important  groups  of  domestic- 
controlled  companies  engaged  in  the  grain-exporting  business  in 
1921,  viz :  The  Gray-Rosenbaum  group  consisting  of  P.  N.  Gray  & 
Co.  (Inc.),  the  J.  Rosenbaum  Grain  Co.,  and  the  Gray-Rosenbaum 
Grain  Co.,  jointly  owned  by  the  first  two  companies;  the  Rosenbaum- 
Armour  group,  which  included  E.  F.  Rosenbaum,  the  Armour  Grain 
Co.,  and  the  Peoples  Industrial  Trading  Corporation,  in  which  an 
important  interest  was  held  by  the  former  two  interests;  and  the 
Barnes- Ames  group,  composed  of  the  Barnes-Ames  Co.  and  its  sub- 
sidiaries. The  first  two  loosely  interrelated  groups  together  exported 
almost  41,000,000  bushels,  or  nearly  12  per  cent  of  the  total  domestic 
and  Canadian  wheat  exported  from  this  country  in  1921,  while  the 
third  group  exported  almost  17,350,000  bushels  of  wheat,  or  5  per 
cent,  of  that  total.  In  certain  of  these  concerns  there  was  some  for- 
eign financial  interest  or  connection  with  foreign  companies. 

(5)  In  the  business  of  exporting  grain  as  conducted  at  the  present 
time  in  this  country  there  is  very  little  fixed  investment  in  plant, 
almost  all  the  funds  employed  being  in  liquid  form  and  a  large  pro- 
portion generally  borrowed.  For  26  companies,  exporting  134,000,000 
bushels  of  wdieat  in  1921,  or  about  39  per  cent  of  the  total  quantity 
exported,  the  total  funds  employed  aggregated  $51,711,000  of  which 
$25,010,000  was  borrowed.  These  26  companies  had  net  earnings 
(before  payment  of  interest  or  Federal  taxes)  of  $11,479,000,  of 
which  $2,500,000  was  payable  as  interest.  The  grain  exi3ort  merchant 
stores  such  grain  as  he  holds  in  public  warehouses  and  often  sells 
again  in  a  brief  interval,  and  even  on  the  same  day.  This  is  shown 
by  the  fact  that  for  grain  exporting  companies  whose  records  were 
examined  the  annual  turnover  of  capital  (capital  stock,  surplus,  and 
reserves)  as  indicated  by  sales  was  23  times  in  1920  and  31  times  in 
1921,  while  taking  exporters  and  fobbers  combined  the  annual  turn- 
over in  1920  was  22  times  and  in  1921  nearly  27  times.  Taking  indi- 
vidual companies  several  instances  of  companies  having  a  turnover 
in  1920  or  1921  of  more  than  100  times  a  year  are  included.  Although 
the  average  per  cent  of  profit  on  each  turnover  was  small,  for  ex- 


LETTER  OF   SUBMITTAL.  XV 

porters  2.5  per  cent  in  1920  and  nearly  1  per  cent  in  1921,  the  fre- 
quency of  turnover  often  gave  large  net  profits  on  investment. 

(6)  The  books  of  32  companies  exporting  nearly  275,000,000 
bushels  of  wheat,  or  80  per  cent  of  the  total  shipped  from  the  United 
States  in  the  calendar  year  1921,  were  examined;  5  of  these  com- 
panies, exporting  about  115,400,000  bushels,  were  American  branches 
of  foreign  houses  and  their  books  and  records  in  this  country  did  not 
show  their  profits.  The  average  profits  of  18  companies,  whose 
principal  business  was  exporting,  for  their  business  year  (including 
gains  or  losses  on  transactions  in  futures)  were  58  per  cent  on  their 
capital  stock,  surplus,  and  reserves  in  1920  and  30  per  cent  in  1921. 
The  average  profits  from  transactions  in  futures  for  exporters  were 
relatively  small  in  1920  and  relatively  large  in  1921.  The  average 
rate  of  return  on  capital  stock,  surplus,  and  reserves,  excluding 
gains  or  losses  on  futures,  was  almost  53  per  cent  in  1920  while 
there  was  a  loss  of  over  3  per  cent  in  1921.  As  already  stated,  most 
of  these  companies  employed  a  large  proportion  of  borrowed  funds — 
about  50  per  cent  of  the  total  funds  used  in  1920  and  about  40  per 
cent  in  1921.  If  the  business  is  successful,  this  method  of  financing, 
while  enhancing  his  risk,  means  relatively  higher  profits  to  the 
proprietor.  The  earnings  of  these  companies  (including  gains  or 
losses  on  futures  trading)  on  the  total  funds  employed  in  the  busi- 
ness, including  capital  stock,  surplus,  reserves,  and  borrowed  money, 
averaged  almost  29  per  cent  in  1920  and  19  per  cent  in  1921.  In 
considering  these  profits  it  may  also  be  observed  that  financial  re- 
sources appear  to  be  less  important  than  valuable  trade  connections, 
knowledge  of  conditions  and  especially  credit.  One  of  the  most 
successful  concerns  in  recent  years  appears  to  owe  its  growth  from  a 
small  enterprise  to  a  leading  position  to  its  favorable  trade  con- 
nections. 

(7)  Fobbers,  i.  e.,  companies  selling  grain  for  export  f.  o.  b.  vessel 
port  of  shipment,  had  somewhat  smaller  average  profits  than  ex- 
portei's  in  1920  and  higher  profits  in  1921.  The  average  rate  of  profit 
on  the  capital  stock,  surplus,  and  reserves  (including  gains  or 
losses  from  transactions  in  futures)  for  seven  companies  in  1920 
and  eight  in  1921  was  over  38  per  cent  in  both  years.  The  gains  or 
losses  on  futures  for  fobbers  did  not  have  a  very  marked  effect  on 
the  average  result.  As  in  the  case  of  exporters,  a  large  proportion 
of  the  funds  employed  by  fobbers  was  borrowed  money,  which,  of 
course,  enhanced  their  risk.  The  average  earnings  on  the  total 
funds  employed  in  the  business  including  capital  stock,  surplus, 
reserves,  and  borrowed  money  (including  gains  or  losses  on  futures) 
were  almost  20  per  cent  in  1920  and  over  27  per  cent  the  following 
year. 

(8)  For  individual  companies  che  financial  results  of  both  ex- 
porters and  fobbers  during  1920  and  1921  varied  from  considerable 
losses  to  large  profits.  Though  a  large  part  of  the  merchandising 
was  hedged  in  the  futures  market,  as  already  stated,  apparently 
speculative  transactions  in  futures  also  occurred.  Thus  for  ex- 
porters the  profit  on  capital,  surplus,  and  reserves  (including  the 
losses  or  gains  from  future  trading)  ranged  from  somewhat  more 
than  5  per  cent  to  448  per  cent  in  1920  and  from  a  loss  of  over  20 
per  cent  to  a  profit  of  641  per  cent  in  1921.     Excluding  gains  or 


XVI  LETTER   OF   SUBMITTAL. 

losses  from  futures  the  range  was  from  a  loss  of  nearly  8  per  cent 
to  a  profit  of  over  475  per  cent  in  1920  and  from  55  per  cent  loss  to 
a  profit  of  over  410  per  cent  the  followin<r  year.  Wide  ran^res  in  the 
rate  of  earnino:s  occurred  with  respect  to  the  })usiness  of  fobbers,  and 
wide  variations  also  existed  for  both  jijroups  with  respect  to  the 
profits  earned  on  the  total  funds  employed. 

(0)  The  average  profit  per  bushel  varied  greatly  for  diflf'erent 
grains  and  it  was  generally  larger  in  1920  than  in  1921  for  ex- 
porters. The  average  profit  for  wheat,  excluding  gains  or  losses  on 
futures,  was  8  cents  per  bushel  in  1920  and  only  0.3  of  a  cent  in 
1921.  There  was  on  the  average  a  small  loss  per  bushel  on  wheat 
futures  in  1920,  and  a  profit  of  almost  2.5  cents  per  bushel  in  the 
following  year.  The  total  aA^erage  profit  on  wheat,  including  futures, 
Avas  7.7  cents  per  bushel  in  1920,  and  2.7  cents  per  bushel  the  follow- 
ing year.  On  rye  the  exporters  on  an  average  made  a  profit  of  2.7 
cents  per  bushel,  excluding  gains  or  losses  on  futures,  in  1920  and 
only  0.6  of  a  cent  per  bushel  in  1921.  The  average  profit,  including 
gains  or  losses  on  futures,  was  a  little  over  4  cents  per  bushel  on 
rye  in  the  former  year,  while  there  was  no  change  for  1921.  The 
exporters  on  an  average  made  a  profit  per  bushel  on  corn,  excluding 
gains  or  losses  on  futures,  of  1.2  cents  in  1920  and  a  loss  of  1.3  cents 
in  1921.  There  was  an  average  loss  on  corn  of  2.6  cents  per  bushel 
on  futures  in  1920  and  a  profit  of  1.4  cents  per  bushel  in  1921,  which 
gaA^e  a  net  loss,  including  futures,  of  1.4  cents  per  bushel  in  1920 
and  a  profit  of  only  0.1  of  a  cent  per  bushel  in  1921.  There  were 
wide  variations,  of  course,  for  individual  exporting  concerns. 

(10)  For  fobbers  the  average  profits  on  wheat  did  not  vsltj  as 
much  as  for  exporters  and  were  in  the  neighborhood  of  5  cents 
per  bushel  in  both  years,  including  or  excluding  losses  or  gains  from 
futures.  For  rye  their  average  profits  were  very  high  in  both  years, 
esijecially  in  1921,  when  they  were  about  25  cents  per  bushel,  includ- 
ing or  excluding  gains  or  losses  from  transactions  in  futures.  For 
corn  the  fobbers  lost  on  the  average  even  more  heavil}^  than  the 
exporters  in  1920  but  did  a  little  better  than  the  exporters  in  1921. 
For  individual  concerns  the  results  varied  widely.  The  foregoing 
margins  of  net  profit  per  bushel  both  for  exporters  and  fobbers  were 
calculated  by  the  commission  by  allocating  such  expenses  as  were  not 
distributed  by  the  companies  in  the  most  practicable  manner  possible. 

(11)  As  already  stated,  the  commission  is  now  taking  legal  steps 
to  secure  access  to  the  books  and  records  of  certain  grain-exporting 
companies  in  Baltimore.  The  companies  refusing  access  included 
th^  Baltimore  Grain  Co.,  C.  P.  Blackburn  &  Co..  J.  T.  Fahey  &  Co., 
Gill  &  Fisher,  Hammond,  Snyder  &  Co.,  and  H.  C.  Jones  &  Co., 
which  in  the  aggregate  probably  handled  not  less  than  20.000.000 
bushels  of  wheat  in  1921.  This  refusal  materially  detracted  from 
the  completeness  of  this  inquiry. 

(12)  The  United  States  Grain  Corporation  (and  its  predecessor, 
the  United  States  Food  Administration  Grain  Corporation)  handled 
most  of  the  wheat  sold  for  export  for  the  period  September,  1917- 
June  30,  1920.  During  the  fiscal  year  ending  June  30,  1919.  it  sold 
173,450,000  bushels  of  wheat  for  export  and  in  the  following  15 
months  97,870,000  bushels.  Although  the  Grain  Corporation  was 
not  organized  for  profit,  it  added  a  small  percentage  to  the  cost  of 


LETTER   OF   SUBMITTAL.  XVII 

sales  to  cover  expenses.  The  total  net  profits  from  all  sources  for 
the  period  September  1, 1917.  to  the  end  of  February,  1921,  amounted 
to  approximately  $51,000,000.  The  rate  of  earnings  on  the  total 
funds  employed  was  about  10.5  per  cent  for  the  fiscal  year  ending 
June  30,  1919,  and  not  quite  2  per  cent  in  the  following  year.  The 
profit  per  bushel  for  the  Grain  Corporation  was  a  little  over  4  cents . 
per  bushel  on  wheat  (including  the  profits  from  the  sale  of  wheat 
imported  from  Australia)  for  the  period  prior  to  June  30,  1919,  and 
2.6  cents  per  bushel  for  the  next  15  months.  On  rye  it  was  4  cents 
per  bushel  prior  to  June  30,  1919,  and  due  to  increase  in  value  of 
inventories  almost  23  cents  per  bushel  the  following  year ;  the  profit 
on  barley  was  6.6  cents  per  bushel  in  the  earlier  period  and  about 
3  cents  per  bushel  after  July  1,  1919. 

(13)  While  during  most  of  1920  wheat  importations  into  the 
principal  markets  in  western  Europe  were  still  largely  controlled 
by  governmental  organizations  established  during  the  World  War, 
the  grain  trade  was  to  a  large  extent  decontrolled  by  the  spring  of 
1921,  and  thereafter  foreign  governmental  buying  apparently  no 
longer  dominated  the  American  grain  markets. 
Respectfully, 

Nelson  B.  Gaskill,  Chairman. 

Victor  Murdock. 

John  F.  Nugent. 

Huston  Thompson. 
106205°— 22 2 


SUMMARY. 


ORIGIN    AND    SCXDPE. 


This  report  on  the  methods  and  operations  of  ^rrain  exporters  is 
made  in  compliance  with  Senate  Kesohition  133,  Sixty-reventh  Con- 
gress, second  session.  This  resohition  directed  the  commission  to 
ascertain  the  profits  or  lo&ses  of  the  principal  grain  exporting  firms 
and  corporations;  the  facts  regarding  their  organization,  ownership, 
and  interrelationship,  including  the  extent  of  their  control  of  the 
facilities  used  by  them:  the  organization,  methods  of  operation,  and 
agencies  used  by  foreign  buyers  in  this  country,  the  margins  between 
the  farm  and  export  prices  of  grain;  and  all  the  facts  concerning 
market  manipulation,  if  any,  in  connection  with  large  export  or  do- 
mestic transactions  in  grain.  The  resolution  specified  that  the  com- 
mission should  begin  with  the  harvest  of  the  1919  grain  crop  and 
that  it  should  report  its  findings  and  recommendations  to  the  Senate 
as  promptly  as  the  various  phases  of  the  work  were  completed. 

In  order  that  the  facts  concerning  the  more  important  phages  of 
the  export  grain  business  might  be  made  available  to  the  Senate  and 
to  the  public  at  the  earliest  possible  date,  the  commission  divided  the 
inquiry  into  several  parts,  and,  in  harmony  with  the  desire  of  the 
Senate,  as  expressed  in  the  resolution  directing  the  inquiry,  the  com- 
mission is  reporting  in  this  volume  the  facts  covering  the  profits  of 
exporting  firms,  including  their  subsidiary  and  allied  concerns;  the 
organization,  ownership,  control,  and  interrelationships  of  companie'? 
directly  or  indirectly  connected  with  the  export  grain  trade,  and  such 
information  as  was  obtainable  in  this  country  concerning  the  agencies 
used  by  foreign  buyers  of  grain  in  the  United  States.  To  the  second 
volumes  of  this  report  was  left  the  discussion  of  the  margins  between 
farm  and  export  prices,  the  freights  and  other  costs  of  handling, 
the  ownership  and  control  of  the  facilities  used  in  the  export  grain 
trade,  and  the  facts  regarding  the  competitive  situation  and  market 
manipulations  in  the  grain  business. 

PRODUCTION  or  PRINCIPAL  GRAINS. 

According  to  the  best  available  statistics  the  world's  production 
of  wheat  for  the  period  1910-1921  fluctuated  from  a  maximum 
of  almost  4,128,000,000  bushels  in  1915  to  a  minimum  of  about 
2,008,000,000  bushels  in  1917.  From  1917  there  was  a  steady  increase 
in  the  world's  production  of  wheat,  until  in  1921  about  2,990,000,000 
bushels  were  produced.^  Throughout  the  period  1910-1921  the  United 
States  maintained  the  leading  position  as  a  wheat-producing  country. 
Prior  to  the  World  War  its  proportion  of  the  world  crop  ranged^ 

*  statistics  for  Russia  are  not  available, 

XIX 


XX  SUMMARY. 

from  18  to  25  per  cent  and  from  1916  to  1921  from  27  to  37  per  cent 
of  the  world  total,  not  including  Russia,  for  which  country  statistics 
are  not  available.  Great  Britain,  France,  Italy,  and  the  Netherlands, 
in  the  order  named,  were  the  largest  wheat  importing  countries  dur- 
ing the  10-year  period  1910-1919.  Great  Britain  alone  imported 
from  29  to  42  per  cent,  with  an  average  of  34  per  cent,  of  the  total 
quantity  of  wheat  imported  by  the  principal  countries  of  the  world 
during  that  period. 

In  the  five-year  period  prior  to  the  World  War  about  70  per  cent  of 
the  world's  rye  crop  was  produced  in  European  Russia  and  Germany, 
while  the  Ufiited  States  raised  only  from  about  2  to  3i  per  cent  of 
the  world  total.  From  1917  to  1921  the  production  of  this  country 
was  practically  double  the  pre-war  total.  The  import  demand  for 
rye  is  largely  from  European  countries. 

The  world  production  of  barley  is  only  about  one-third  that  of 
wheat.  From  1910-1915  the  United  States  produced  from  about  11 
to  a  little  over  15  per  cent  of  the  world  total.  Prior  to  the  \Vorld 
*VVar  Austria-Hungary,  India,  the  Netherlands,  Rumania,  and  Rus- 
sia were  the  important  barley-producing  countries,  while  the  im- 
ports are  chiefly  into  western  Europe. 

In  the  period  1910-1915  the  world's  production  of  oats  fluctuated 
from  about  3,809,000,000  bushels  in  1911  to  4,697.000,000  bushels  in 
1913.  Since  1917  statistics  from  some  important  oat-producing 
countries  are  not  available,  but  the  United  States  undoubtedly  leads 
the  world  as  a  producer  of  oats.  Prior  to  1914  the  principal  coun- 
tries producing  a  surplus  of  oats  for  export  were  Argentina,  Canada, 
Russia,  and  the  United  States,  while  the  import  demand  was  from 
Western  Europe. 

According  to  the  best  available  statistics  the  world  corn  crop  for 
the  period  1910-1921  ranged  from  a  maximum  of  4,372,000,000 
bushels  in  1912  to  a  minimum  of  3,129,000,000  bushels  in  1918.  The 
United  States  is  by  far  the  largest  corn-producing  country  in  the 
world.  Its  proportion  of  the  world  crop  ranged  from  approximately 
68  per  cent  in  1913  to  over  87  per  cent  in  1917.  Corn  is  largely  con- 
sumed in  the  countries  in  which  it  is  grown.  The  Argentine,  the 
United  States,  and  British  South  Africa  were  leading  exporting 
countries  during  the  period  1910-1921.  Great  Britain,  the  Nether- 
lands, France,  and  Denmark  were  the  principal  importing  countries. 

IMPORTANCE  OF  GRAIN  EXPORTS. 

The  exports  of  grain,  including  products  made  directly  from  grain, 
such  as  flour  and  meal,  constituted  from  6  to  slightly  more  than  17 
per  cent  of  the  value  of  the  total  domestic  exports  from  the  United 
States  during  the  period  1910-1921.  Wheat,  corn,  rj^e,  barley,  and 
oats,  and  products  made  directly  therefrom,  furnish  approximately 
90  per  cent  of  the  value  of  all  breadstuffs  exported  from  the  United 
States.  The  quantities  of  these  grains  exported  was  very  large 
during  the  seven-year  period  1915-1921.  The  net  exports  of  wheat, 
and  wheat  products,  i.  e.,  exports  less  imports,  were  much  larger  in 
quantity  for  1921  than  for  any  previous  year,  but  the  value  was  ma- 
terially smaller  than  for  either  1919  or  1920  on  account  of  the  rapid 
fall  in  prices.    The  quantity  and  value  of  the  net  exports  of  corn 


SUMMARY.  XXI 

and  its  products  were  larger  in  1921  than  in  any  previous  year.  The 
quantities  and  values  of  rye  exports  were  unusually  large  during 
each  of  the  three  years  1919-1921.  The  quantity  of  barley  and  barley 
products  exported  was  large  in  1921,  but  the  value  was  much  smaller 
than  for  several  other  years.  The  net  exports  of  oats  were  small 
botb  in  volume  and  in  value  in  1920  and  1921. 

The  production  of  wheat  and  rye  in  this  country  is  normally  greatly 
in  excess  of  the  domestic  demand.  During  the  12-)-ear  period  1910- 
1921  the  wheat  export  or  its  flour  equivalent  ranged  from  a  minimum 
of  about  10  per  cent  of  the  crop  in  1910  to  a  maximum  of  over  41  per 
cent  in  1921.  From  1910  to  1913  the  proportion  of  rye  exported  was 
small,  but  beginning  with  1914  the  proportion  exported  ranged  from 
a  minimimi  of  almost  18  per  cent  in  1918  to  a  maximum  of  98  per 
cent  in  1920. 

EUROPEAN  GOVERNMENTAL  CONTROL. 

During  the  war  period  the  allied  and  other  Governments  exercised 
strict  governmental  control  over  the  purchase  and  distribution  of 
the  important  articles  of  food.  By  the  spring  of  1917  this  control 
was  extended  to  the  importation  of  cereals  and  cereal  food  substitutes. 
The  British  royal  commission  on  food  supply  was  the  most  impor- 
tant overseas  organization  engaged  in  the  enforcement  of  this  <rov- 
ernmental  control.  Its  agent  in  the  United  States  was  the  Wheat 
Export  Co.,  which  was  incorporated  under  the  laws  of  New  York 
State.  This  company  maintained  its  headquarters  in  Xew  York 
City,  and  all  of  its  trading  was  for  the  allied  and  neutral  Governments. 

The  decontrol  of  the  grain  trade  by  the  allied  Governments  was 
effected  gradually.  The  royal  commission,  which  had  control  of  the 
grain  trade  in  Great  Britain,  arrived  at  an  agreement  with  the 
British  milling  industry  whereby  a  scheme  of  progressive  decontrol 
was  begun  in  April,  1921,  and  by  September.  1921,  both  the  milling 
industry  and  grain  trade  were  completely  under  private  control.  In 
France  the  Minister  of  Finance  published  a  notice  on  September  16, 
1921,  to  the  effect  that  it  had  been  decided  to  allow  the  temporary  ad- 
mission of  foreign  wheat  under  pre-war  conditions.  These  conditions 
accorded  free  temporary  admission  to  wheat  imported  with  a  view  to 
reexportation  after  being  manufactured  into  flour  and  other  wheat 
products.  Exports  of  flour  and  products  made  from  wheat  could  be 
made  in  quantities  corresponding  to  that  of  foreign  wheat  imported. 

Government  control  of  wheat  importation  into  Italy  was  continued 
through  1921.  In  March,  1921,  the  Italian  commissioner  general  of 
the  food  commissariat  announced  that  "  the  change  from  a  Govern- 
ment monopoly  to  freedom  of  trade  must  be  carried  out  gradually 
and  cautiously."  The  return  of  private  control  in  Italy  was  com- 
plicated by  the  fact  that  the  price  of  wheat  imported  from  North 
America  had  declined  from  292  lire  per  quintal  in  May,  1920,  to 
130  to  140  lire  per  quintal  by  July,  1921,  the  date  on  which  the  Italian 
Government  had  fixed  the  price  to  home  producers  at  125  lire  per 
quintal  for  the  northern  and  central  Provinces  and  at  14G.50  lire 
per  quintal  for  the  southern  Provinces.  On  account  of  these  condi- 
tions a  complicated  system  of  variable  duties  and  bounties  was  intro- 
duced in  order  to  guarantee  to  the  domestic  producer  the  promised 
prices. 


XXII  SUMMARY. 

Licenses  were  not  required  for  the  importation  of  wheat  into 
Be]<^num  after  August,  1921,  and  by  September  15,  1921,  all  govern- 
mental restrictions  on  the  grain  trade  had  been  removed. 

In  Spain  the  importation  of  foreign  wheat  Avas  prohibited  by 
an  embargo  effective  November  8,  1921,  and  only  shipments  actually 
en  route  at  that  time  were  exempt  from  that  embargo.  The  pro- 
hibition of  wheat  imports  at  this  time  was  due  to  unusually  heavy 
imports  during  September,  1921. 

Prior  to  the  World  War,  Rumania  and  Russia  supplied  a  large 
proportion  of  the  wheat  imports  into  other  European  countries.  Since 
the  war  Russia  has  not  been  a  factor  in  supplying  the  world  grain 
market.  Rumania  attempted  Government  control  of  the  1921  crop. 
On  August  15,  1921,  the  council  of  ministers  of  that  country  de- 
creed that  50  per  cent  of  the  grain  produced  during  1921  should  be 
free  for  export,  and  fixed  the  maximum  price  at  which  the  balance 
could  be  sold  for  domestic  consumption.  The  quantity  available 
for  export  was  placed  at  the  disposal  of  a  Government  purchasing 
commission  which  operated  through  the  village  cooperative  asso- 
ciations. Further  Government  regulations  prohibited  the  private 
export  of  wheat,  rye,  and  hay,  the  State  reserving  to  itself  the 
right  of  exporting.  The  Government  organized  a  company  called 
the  Syndex  to  control  production  and  exportation.  The  peasants 
realizing  practically  no  profit  on  their  wheat  at  the  Government 
price,  curtailed  the  wheat  acreage,  and  on  December  1,  1921,  it  was 
announced  that  it  had  become  necessary  to  release  Avheat  and  rye 
from  the  special  regulations  hitherto  imposed. 

In  Germany  there  are  about  150  importers  of  grain.  These  im- 
porters organized  a  combination,  or  cartel,  to  purchase  grain  in 
foreign  countries  through  a  single  agency.  Exports  of  wheat  are 
prohibited  and  the  Government  takes  two-sevenths  of  the  domestic 
crop  at  a  price  of  2,300  marks  per  metric  ton.  This  price  was  to 
continue  until  the  summer  of  1922,  and  it  amounted  to  about  33 
cents  per  bushel,  or  less  than  one-third  of  the  world  price.  The 
German  Government  requires  imports  equal  to  about  two-sevenths 
of  the  domestic  crop,  and  it  sells  the  requisitioned  two-sevenths 
and  the  quantity  imported  at  approximately  two-thirds  of  the  world 
price.  The  German  farmers  were  allowed  to  sell  their  surplus. 
Effective  August  18,  1921,  the  importation  of  wheat,  rye,  and  spelt 
was  permitted. 

NATURE    or    EXPORT    BUSINESS. 

The  business  of  export  concerns  whose  records  were  examined  was 
not  homogeneous,  and  there  were  marked  differences  in  the  field  of 
operations  of  different  companies.  The  purchases  of  some  domestic 
exporters  were  largely  made  directly  from  country  elevators  or  from 
the  producer,  while  others  made  the  bulk  of  their  purchases  f.  o.  b. 
vessel  at  Atlantic  or  Gulf  seaboard.  The  sales  of  these  concerns 
were  usually  made  for  delivery  to  the  foreign  purchaser  at  the 
foreign  port  of  destination.  Another  important  group  comprised 
the  so-called  fobbers,  who  purchased  grain  in  the  interior  for  the 
purpose  of  selling  it  to  exporters  f.  o.  b.  vessel  at  seaboard.  Some 
companies  did  a  mixed  fobbing  and  exporting  business;  they  are 
grouped  here  according  to  the  predominant  character  of  their  trade, 


SUMMAKY.  XXIII 

and  the  profits  shown  are  those  for  the  entire  grain  business.  The 
purchases  of  foreign  concerns  with  branches  in  this  country  were 
usual]}'  made  f.  o.  b.  vessel  at  seaboard,  wliile  their  sales  were  made 
directly  to  the  consumer  in  foreign  countries. 

IMPORTANCE  OF  FOREIGN  INTERESTS. 

A  significant  fact  developed  by  tliis  inquiry  is  the  large  proportion 
of  grain  that  is  exported  by  foreign  companies  or  by  companies  con- 
trolled by  foreign  interests.  In  1921,  for  example,  two  foreign  con- 
cerns exported  over  one-fourth  of  the  total  of  345,000,000  bushels 
of  wheat,  including  Canadian  shipments  (280,000,000  bushels  of 
domestic  and  65,000,000  bushels  of  Canadian  wheat)  shipped  from 
United  States  ports.  Eight  entirely  foreign-owned  companies  ex- 
ported about  106,000.000  bushels  of  wheat,  or  nearly  31  per  cent, 
and  14  foreign-owned  or  foreign-controlled  concerns  shipped  about 
133,500,000  bushels,  or  over  38  per  cent  of  the  total.  An  examination 
of  the  records  of  a  number  of  the  American  branches  of  foreign 
houses  disclosed  the  fact  that  their  records  in  this  country  show  onlj'^ 
cost  of  sales  and  operating  expenses,  but  do  not  show  the  sales  real- 
ization or  i^rofits  made  on  grain  exported  from  the  United  States. 

CONTROL   AND   INTERRELATIONS. 

As  already  stated,  two  concerns  handled  over  one-fourth  of  the 
total  quantity  of  v.heat  exported  from  United  States  ports  in  1921, 
including  Canadian  shi]:)ments,  which  could  not  be  separated  from 
domestic  wheat.  For  the. same  year  4  firms  shipped  over  36  per 
cent,  8  about  50  per  cent,  21  about  75  per  cent,  and  36  over  85  per 
cent  of  all  the  wheat  exported  from  United  States  ports.  There 
Avere  about  90  firms  that  exported  wheat  from  the  United  States  in 
1921.  The  number  of  companies  engaged  in  exporting  wheat  was 
larger  than  that  for  any  other  grain. 

During  the  period  covered  by  this  inquiry  there  were  two  groups 
of  domestic  concerns  which  handled  a  large  proportion  of  the 
grain  exported  fi'om  the  United  States,  viz,  the  loosel}'  interrelated 
Gray-Rosenbaum  and  Armour-Rosenbaum  interests  and  the  closely 
related  group  of  the  Barnes-Ames  Co.,  and  affiliated  couipanies. 
There  were  some  other  concerns  that  had  subsidiaries  or  afhliated 
companies,  but  they  did  not  handle  a  large  percentage  of  the  grain 
exported.  P.  N.  Gray  &  Co.  (Inc.)  and  the  J.  Rosenbaum  Grain  Co. 
were  the  joint  owners  of  the  Gray-Rosenbaum  Grain  Co.  (Inc.), 
while  the  Armour  Grain  Co.  and  E.  F.  Rosenbaum  of  the  J.  Rosen- 
baum Grain  Co.  jointly  owned  an  important  interest  in  the  People's 
Industrial  Trading  Corporation.  The  Chesapeake  Export  Co.  (Inc.) 
was  owned  by  J.  Rosenbaum  Grain  Co.  and  the  two  Rosenbaum 
brothers,  important  stockholdei's  in  the  latter  company.  The  Gray, 
Rosenbaum,  and  Armour  interests  taken  together  exported  almost 
41.000,000  bushels  of  Avheat,  or  almost  12  per  cent  of  the  domestic  and 
Canadian  wheat  exported  from  United  States  ports  in  1921. 

The  Barnes-Ames  group  included  four  affiliated  companies  that 
were  engaged  in  exporting,  viz,  the  Barnes- Ames  Co.,  the  Bai-nes- 
Irwin  Co..  the  Barnes-Jackson  Co..  and  the  Barnes-Piazzek  Co.  In 
addition  to  the  above,  Julius  H.  Barnes,  the  head  of  this  group,  is 


XXIV  SUMMARY. 

interested  in  the  Nye- Schneider-Fowler  companies,  which  include  the 
Nye-Jenks  Grain  Co.,  the  Nye-Schneider-Jenks  Co.,  and  tha  Nye- 
Schneidcr-Fowler  Co.  The  Barnes  companies  exported  a  little  over 
17,350,000  bushels  of  wheat  in  1921,  or  about  5  per  cent  of  the 
total. 

Of  the  comi^anies  which  were  important  fobbers  of  export  grain 
in  1921,  the  Bartlett-Frazier  Co.,  Chicago;  the  Trans-Mississippi 
Grain  Co..  Omaha;  and  the  Federal  Grain  Co.,  Kansas  C'ty,  were 
closely  affiliated.  The  Trans-Mississippi  Grain  Co.  owned  a  ma- 
jority of  the  stock  of  the  Federal  Grain  Co.,  while  the  interests  con- 
trolling the  Bartlett-Frazier  Co.  held  a  large  part  of  the  stock  of  the 
Trans-Mississippi  Grain  Co. 

PROPORTION  or  EXPORT  BUSINESS  EXAMINED. 

Profits  were  ascertained  for  most  of  the  large  exporting  companies 
excepting  those  located  on  the  Pacific  coast  and  in  Baltimore.  The 
Pacific  coast  companies  were  omitted  in  order  to  make  an  earlier 
report,  while  the  Baltimore  concerns,  on  advice  of  counsel,  refused 
access  to  their  books  and  records.  The  commission  is  now  taking 
legal  steps  to  secure  access  to  the  records  of  these  companies.  The 
companies  refusing  access  included  the  Baltimore  Grain  Co.,  C.  P. 
Blackburn  &  Co.,  J.  T.  Fahey  &  Co.,  Gill  &  Fisher,  Hammond, 
Snyder  &  Co.,  and  H.  C.  Jones  &  Co.  These  concerns  probably 
handled  in  the  aggregate  not  less  than  20,000,000  bushels  of  wheat 
in  1921.  The  absence  of  information  for  the  above  companies  ma- 
terially detracted  from  the  completeness  of  this  report. 

The  books  and  records  of  32  concerns  engaged  in  the  grain  export- 
ing and  fobbing  (selling  to  exporters  free  on  board  vessel  at  sea- 
ports) business  were  examined  by  the  commission.  The  records  of 
five  American  branches  of  foreign  houses  were  examined,  but  their 
books  in  this  country  did  not  disclose  the  profits  derived  from  their 
exports  from  the  United  States.  The  information  obtainable  from 
1  company  was  incomplete  so  that  the  profits  for  26  companies. 
18  of  which  were  principally  exporters  and  8  largely  fobbers,  were 
obtained  for  1921.  Some  of  the  concerns  did  no  exporting  or  fob- 
bing in  1920  and  investment  and  earnings  are  presented  for  15  ex- 
porters and  T  fobbers  for  that  year. 

The  exporters  whose  records  were  examined  handled  the  bulk  of 
the  grain  exported  from  the  United  States  during  1920  and  1921. 
They  exported  about  275,000,000  bushels  of  wheat  during  the  calen- 
dar year  of  1921,  or  80  per  cent  of  the  domestic  and  Canadian  wheat 
exf>orted  from  the  United  States  in  that  year. 

RATE    or   PROFIT. 

Profits  are  shown  both  including  and  excluding  gains  or  losses 
from  transactions  in  futures.  These  transactions  were  generally 
hedges  employed  to  reduce  the  business  risks,  but  apparently  to  some 
extent  they  were  pureh^  speculative  ventures.  In  the  wheat  market 
futures  trading,  which  was  suspended  during  the  war,  was  not  re- 
sumed until  July  15,  1920;  consequently  the  results  for  companies 
closing  their  business  year  June  30,  1920,  showed  no  futures  trading 
in  wheat. 


SUMMARY.  XXV 

The  export  grain  trade  is  essentially  a  merchandising  business, 
and  a  laroc  part  of  the  money  employed'  in  it  is  borrowed.  Approxi- 
mately 50  per  cent  of  the  money  used  in  the  business  by  the  hrms 
Avhose  books  were  examined  in  1920,  and  40  per  cent  in  1921,  con- 
sisted of  loans.  The  borrowed  funds  employed  in  the  business  con- 
sisted almost  entirely  of  short-time  loans,  and  the  amount  of  these 
loans  fluctuated  greatly  from  month  to  month.  This  method  of 
financing  tends  to  enhance  the  risk  of  the  merchant,  but  if  his  busi- 
ness is  successful  it  yields  much  larger  profits.  Experience,  ability, 
a  thorough  knowledge  of  the  export  grain  trade,  good  connections 
in  importing  countries  and  especially  credit  are  more  essential  to 
success  than  the  control  of  large  capital. 

The  rate  of  profit  for  exporters  and  fobbers  is  shown  first,  upon 
the  capital  stock,  surplus,  and  reserves,  which  constitute  the  stock- 
holders' investment,  and  second,  upon  the  capital  stock,  surplus, 
reserves,  and  borrowed  money,  which  includes  all  of  the  funds  em- 
l^loyed  in  the  business.  The  earnings  which  were  related  to  the 
stockholders'  investment  were  those  derived  from  the  grain  trade 
before  the  deduction  of  P'ederal  taxes  or  of  excessive  bonuses,  while 
those  which  were  related  to  the  capital  stock,  surplus,  and  borrowed 
funds  used  in  the  grain  business  included  in  addition  to  the  above 
the  interest  paid  on  borrowed  money. 

In  1920  the  exporters  showed  a  larger  average  rate  of  profit  than 
fobbers,  while  in  1921  the  fobbers  had  a  much  higher  average  rate 
of  earnings.  The  average  rate  of  return  for  exporters  in  1920  on 
the  capital  stock  and  surplus,  excluding  losses  or  gains  from  trans- 
actions in  futures,  was  almost  53  per  cent,  and  that  for  fobbers  about 
M  per  cent.  Including  the  results  for  futures  trading,  the  profit  was 
almost  58  per  cent  for  exporters  and  over  38  per  cent  for  fobbers. 

In  the  same  year,  1920,  the  average  rate  of  profit  on  all  funds 
employed  in  the  business,  excluding  losses  and  gains  on  futures,  was 
almost  27  per  cent  for  exporters  and  approximately  18  per  cent 
for  fobbers.  Including  profits  and  losses  on  futures  trading,  the 
rate  of  return  was  nearly  29  per  cent  for  exporters  and  practically 
20  per  cent  for  fobbers. 

In  1921  the  rate  of  return  on  the  capital  stock,  surplus,  and  re- 
serves, excluding  the  results  for  transactions  in  futures,  was  a  loss 
of  over  3  per  cent  for  exporters  and  a  profit  of  almost  31  per  cent 
for  fobbers.  Including  the  results  from  futures  trading,  the  ex- 
porters showed  a  profit  of  about  30  per  (cnt  and  the  fobbers  slightly 
more  than  38  per  cent.  The  average  return  on  all  of  the  funds  em- 
ployed in  the  grain  business,  i.  e.,  capital  stock,  surplus,  and  bor- 
row^ed  funds,  before  the  inclusion  of  gains  or  losses  on  futures,  was 
about  3^  per  cent  for  exporters  and  nearly  23  per  cent  for  fobbers. 
Including  gains  or  losses  in  futures,  these  rates  were  increased  to 
1'   per  centtfor  exporters  and  to  a  little  over  27  per  cent  for  fobbers. 

FREQUENCY   OF   TURNOVER. 

In  the  business  of  exporting  grain  as  conducted  at  the  present 
time  in  this  country  there  is  very  little  fixed  investment  in  plant; 
almost  all  the  funds  employed  being  in  liquid  form  and  a  large 
proportion  generally  borrowed.  For  2G  companies,  exporting 
134,000,000  bushels  of  wheat  in  1921,  or  about  39  per  cent  of  the 


XXVI  SUMMARY. 

total  quantity  exported,  the  total  funds  employed  aggregated 
$51,711,000,  of  which  $25,010,000  was  borrowed.  These  26  companies 
had  net  earnings  (before  payment  of  interest  or  Federal  taxes)  of 
$11,479,000,  of  which  $2,500,000  was  payable  as  interest.  The  export 
grain  merchant  stores  such  grain  as  he  holds  in  public  warehouses 
and  often  sells  again  in  a  brief  interval,  and  even  on  the  same  day. 
This  is  shown  by  the  fact  that  for  grain  exporting  companies  whose 
records  Avcre  examined  the  turnover  of  capital  (capital  stock,  surplus, 
and  reserves)  as  indicated  by  sales  was  23  times  in  1920  and  31  times 
in  1921,  while  taking  exporters  and  fobbers  combined  the  turnover 
in  1920  was  22  times  and  in  1921  nearly  27  times.  Taking  individual 
companies,  several  instances  of  companies  having  a  turnover  in  1920 
or  1921  of  more  than  100  times  a  year  are  included.  Although  the 
average  per  cent  of  profit  on  each  turnover  was  small,  for  exporters 
2.5  per  cent  in  1920  and  almost  1  per  cent  in  1921,  the  frequency  of 
turnoAer  often  gave  large  net  profits. 

MARGIN    OF    rnOFIT    PER    BUSHEL. 

The  companies  engaged  largely  in  exporting  grain,  whose  profits 
are  shown,  sold  almost  42,000,000  bushels  of  wheat  in  their  1920 
business  year  and  over  174,000,000  bushels  in  1921.  Their  aggregate 
trading  profit  on  cash  wheat,  i.  e.,  the  net  profit  excluding  gains  or 
losses  on  transacations  in  futures  amounted  to  almost  $3,319,000  in 
1920  and  to  only  $423,000  in  1921.  There  was  a  loss  of  a  little  over 
$72,000  on  the  transactions  in  futures  in  1920  and  a  profit  of 
$4,163,000  in  1921.  The  transactions  in  other  grains  were  much 
smaller  than  for  wheat  in  both  years. 

The  concerns  engaged  chiefiy  in  fobbing  sold  67,340,000  bushels 
of  wheat  in  their  business  year  ending  m  1920  and  103,600,000 
bushels  in  1921.  The  net  trading  profit  on  wheat  amounted  to  a 
gain  of  $3,593,000  in  1920  and  of  $4,900,000  in  1921.  The  profits  on 
futures  were  comparatively  small  in  both  years,  in  1920  they  were 
about  $50,000  and  in  1921  almost  $265,000.  The  quantities  of  other 
grains  sold  were  quite  small  in  both  years. 

The  marked  decline  which  occurred  in  wheat  prices  during  the 
latter  part  of  1920  and  in  1921  is  reflected  in  the  average  sales  realiza- 
tion of  the  exporters,  which  declined  from  $2.73  to  $2.01.  In  1920 
the  range  for  the  averages  of  individual  companies  was  from  a 
minimum  of  $2.30  to  a  maximum  of  $3.03,  while  in  1921  it  was  from 
$1.38  to  $2.61.  These  wide  ranges  were  chiefly  due  to  the  period  of 
the  year  in  which  a  particular  company  made  the  bulk  of  its  sales. 

The  aggregate  trading  profit  per  bushel  on  cash  transactions  for 
all  export  companies,  i.  e.,  the  profit  excluding  futures,  was  quite 
large  on  wheat  in  1920  and  small  in  1921.  In  the  former  year  it  was 
almost  8  cents  per  bushel  and  only  0.3  of  a  cent  per  bushel  in  1921, 
There  was  a  small  average  loss  on  futures  in  1920  and  an  average 
profit  of  almost  2^-  cents  per  bushel  in  1921.  The  average  profit, 
iiicluding  the  profit  or  loss  on  futures,  was  7.7  cents  per  bushel  on 
wheat  in  1920  and  2.7  cents  per  bushel  in  1921. 

The  companies  engaged  chiefly  in  fobbing  had  on  the  average  a 
net  sales  realization  of  $2.38  per  bushel  on  wheat  in  1920  and  of 
$2.14  per  bushel  in  1921.  The  average  for  fobbers  in  1921  was  higher 
than  that  shown   for  exporters  in  that  3^ear.     This  was  because  a 


SUMMARY.  XXVII 

larfje  proportion  of  the  sales  were  made  while  prices  were  still  rela- 
tively high.  The  fobl)ers  showed  substantial  net  trading;  profits  on 
cash  wheat  in  both  years.  In  1920  the  average  was  5.3  cents  per 
bushel  and  in  the  following  year' 4.7  cents.  The  average  profits  from 
transactions  in  wheat  futures  were  small  in  both  3'ears;  in  1920 
this  average  profit  was  5.4  cents  per  bushel  and  in  1921  it  was  5 
cents. 

The  average  net  sales  realization  for  exporters  was  $2.05  per  bushel 
for  rye  in  1920  and  $1.90  in  the  following  year.  The  average  net 
profit  per  bushel  on  cash  rye,  excluding  futures,  was  2.7  cents  in  1920 
and  onl}^  0.6  of  a  cent  in  1921,  The  net  gains  on  futures  increased 
the  average  profits  to  a  little  over  4  cents  per  bushel  in  1920,  while 
there  was  no  change  for  1921. 

The  average  net  sales  realization  on  rye  for  fobbers  averaged  4 
cents  per  bushel  higher  in  1921  than  in  1920.  This  was  due  to  a 
very  low  sales  realization  for  one  company  handling  a  large  propor- 
tion of  the  total  quantity  sold.  The  net  trading  profit  on  cash  rj^e 
was  large,  averaging  over  $0.11  per  bushel  in  1920  and  slighth'  more 
than  $0.26  in  1921.  There  was  a  slight  gain  on  futures  in  1920  and 
a  loss  of  1  cent  per  bushel  in  1921.  Including  futures,  the  profits 
averaged  $0.12  per  bushel  in  1920  and  a  little  over  $0.25  per  bushel 
in  the  following  year. 

The  exporters  showed  an  average  net  sales  realization  of  about 
$1.49  per  bushel  on  cash  barley  in  1920  and  of  only  $0.86  in  1921. 
In  1920,  excluding  futures,  there  was  an  average  net  trading  loss  of 
0.7  of  a  cent  per  bushel  and  a  profit  of  only  0,1  of  a  cent  in  1921. 
The  average  gain  on  futures  was  exactly  the  same,  0.9  of  a  cent  per 
bushel  for  each  year.  Including  futures,  there  was  an  average  profit 
of  0.2  of  a  cent  per  bushel  in  1920  and  of  1  cent  per  bushel  the  follow- 
ing year. 

The  fobbers  had  a  relatively  high  average  sales  realization  on  bar- 
\ey  in  both  years.  In  1920  their  average  was  $1.56  per  bushel  and 
in  the  following  year  an  average  of  almost  $0.95  per  bushel.  This 
average,  which  was  higher  than  for  exporters,  was  due  to  large  sales 
by  one  company  in  each  year  while  prices  were  still  relatively  high. 
There  was  an  average  net  trading  profit,  excluding  futures,  of  a  little 
over  3  cents  per  bushel  in  1920  and  a  loss  of  almost  10  cents  per 
bushel  in  1921.  The  average  was  not  materially  changed  when  the 
losses  and  gains  from  futures  were  included. 

The  average  net  sales  realization  of  exporters  on  oats  was  about 
$0.90  per  bushel  in  1920  and  almost  $0.69  cents  in  1921.  There  was 
an  average  net  loss  of  2.8  cents  per  bushel  in  1920,  excluding  futures, 
and  a  profit  of  only  0.7  of  a  cent  per  bushel  in  1921.  The  average 
profit  on  futures  was  0.5  of  a  cent  per  bushel  in  1920  and  2.1  cents 
per  bushel  the  following  year.  The  inclusion  of  futures  reduced  the 
average  net  loss  to  2.3  cents  per  bushel  in  the  former  year  and  in- 
creased the  profit  to  2.8  cents  per  bushel  in  1921. 

The  fobbers  showed  an  average  net  sales  realization  of  $0,87  per 
bushel  for  oats  in  1920  and  of  $0.57  per  bushel  in  1921.  The  average 
cost  of  sales  exceeded  the  net  sales  realization  in  both  years,  conse- 
quently there  was  a  net  trading  loss  on  cash  transactions,  which 
averaged  1.7  cents  per  bushel  in  1920  and  3.5  cents  per  bushel  in  the 
following  year.     There  were   substantial   profits   from  trading  in 


XXVIII  SUMMAltY. 

futures  for  both  years,  averaging  2.7  cents  per  bushel  in  1920  and 
2  cents  per  bushel  the  next  year.  This  gave  an  average  net  profit  of 
1  cent  per  busliel  on  oats  as  the  final  result  for  1920  and  reduced  the 
loss  to  1.5  cents  per  bushel  the  following  year. 

There  was  a  large  decrease  in  tlie  average  net  sales  realization  oj\ 
corn  for  exporters  from  1920  to  1921.  In  the  former  year  the  aver- 
age was  $1.86  per  bushel,  which  declined  to  $0.80  per  bushel  in  1921. 
For  individual  companies  during  the  two-year  period  the  maximum 
average  net  sales  realization  was  $2,11  per  bushel  in  1920  and  the 
minimum  $0.69  in  1921.  The  average  net  trading  profit,  excluding 
futures,  was  1.2  cents  per  bushel  in  1920  and  there  was  a  loss  of  1.3 
cents  per  bushel  in  1921.  There  was  an  average  loss  of  2.6  cents  per 
bushel  on  futures  in  1920  and  a  profit  of  1.4  cents  per  bushel  in  1921, 
giving  as  a  final  result  a  net  loss  of  1.4  cents  per  bushel  in  1920  and 
a  gain  of  0.1  of  a  cent  in  1921. 

The  average  cost  of  sales  exceeded  the  average  net  sales  realization 
for  fobbers  on  corn  in  both  years.  The  average  sales  realization  de- 
clined from  $1.50  per  bushel  in  1920  to  $0.82  in  1921,  while  the  net 
trading  loss  on  cash  corn  was  almost  5  cents  per  bushel  in  the  former 
year  and  1.3  cents  in  1921.  There  was  a  substantial  profit  on  futures, 
averaging  almost  2  cents  per  bushel  for  each  year.  As  a  final  result 
there  was  an  average  net  loss  of  2.8  cents  per  bushel  in  1920  and  an 
average  profit  of  0.6  of  a  cent  per  bushel  in  1921. 

THE  UNITED  STATES   GRAIN   CORPORATION. 

The  Senate  resolution  directing  this  inquiry  instructed  the  com- 
mission to  begin  "  with  the  harvest  of  the  1919  crop.'"  That  crop 
was  controlled  by  the  United  States  Wheat  Director,  and  the  wheat 
exports  were  largely  handled  by  the  United  States  Grain  Corpora- 
tion. The  price  guaranteed  to  the  producer  for  the  1919  crop  was 
the  same  as  that  for  the  crop  of  the  preceding  year.  The  price  of 
No.  1  northern  spring  wheat  and  its  equivalent  at  the  principal  ports 
w^as  $2.20  per  bushel  on  the  Pacific  coast,  $2.30  on  the  Gulf,  and  for 
the  Atlantic  seaboard  it  ranged  from  $2.38|  at  Baltimore  to  $2.39^ 
at  New  York. 

During  the  fiscal  year  ending  June  30,  1920,  the  United  States 
Grain  Corporation  was  financed  by  the  Government  by  a  special  ap- 
propriation of  $1,000,000,000  in  addition  to  its  capital  stock  of  $150,- 
000,000,  which  had  been  previously  appropriated  by  Congress. 

During  the  fiscal  j^ear  ending  June  30,  1919,  the  Grain  Corporation 
sold  for  export  almost  174,000,000  bushels  of  wheat,  for  which  it  re- 
ceived about  $423,000,000.  The  following  fiscal  year  a  little  over 
94,000,000  bushels  were  fobbed,  for  whicli  almost  $226,000,000  were 
received.  In  July,  August,  and  September,  1920,  about  3,600,000 
bushels  Avere  sold  for  export  for  nearly  $10,300,000.  The  quantity 
of  other  grains  sold  was  comparatively  small. 

Although  the  United  States  Grain  Corporation  was  not  organized 
for  profit,  it  added  a  small  per  cent  to  the  cost  of  sales  to  cover  ex- 
penses, which,  from  the  large  volume  of  business  transacted,  to- 
gether with  income  from  other  sources,  gave  a  net  profit  at  the  end 
of  February,  1921,  amounting  to  approximatelj^  $51,000,000.  The 
rate  of  profit  on  the  total  funds  used  in  the  business  was  about  10.5 


SUMMARY.  XXIX 

per  cent  in  the  fiscal  year  ending  June  30,  1919,  and  not  quite  2  per 
cent  the  following  year. 

The  net  earnings  from  the  entire  period,  September  1,  1917- 
February  28,  1921,  on  the  principal  grains  amounted  to  $28,787,000, 
of  Avhich  about  $14,645,000  was  on  wheat,  $12,070,000  on  flour,  $780,- 
000  on  barley,  and  $1,292,000  on  rye.  The  margin  of  profit  on  all 
wheat  handled  (including  Australian  wheat  imported  for  sale  on  the 
Pacific  coast)  was  a  little  over  4  cents  per  bushel  prior  to  June  30, 
1919,  while  it  was  2.6  cents  per  bushel  on  the  business  transacted 
after  June  30,  1919.  The  margin  of  profit  on  rye  was  4  cents  per 
bushel  prior  to  June  30,  1919,  and  almost  23  cents  per  bushel  from 
July  1,  1919,  to  the  close  of  business.  The  large  margin  on  r^^e  in 
the  latter  period  was  due  to  a  marked  increase  in  the  price  between 
date  of  purchase  and  date  of  sale.  The  margin  on  barley  was  6.6 
cents  per  bushel  in  the  earlier  period  and  about  3  cents  per  bushel 
after  July  1,  1919. 


METHODS    AND    OPERATIONS    OF    GRAIN 
EXPORTERS/ 


Chapter  I. 
ORIGIN  AND  SCOPE  OF  THE  INQUIRY. 

Section  1.  Origin  of  the  inquiry. 

This  inquiry  was  made  pursuant  to  the  direction  of  Senate 
Kesohition  133,  Sixty-seventh  Congress,  second  session,  adopted  De- 
cember 22,  1921,  -which  reads  as  follows : 

Whereas  the  condition  of  the  export  market  has  been  alleged  as  one  of  the 
reasons  for  the  decline  in  the  domestic  prices  of  grain  since  the  summer  of 
1920 ;  and 

Whereas  there  nevertheless  has  been  during  the  past  year  a  record  volume  of 
exports  of  grain  from  the  United  States  and  at  prices  showing  a  wide  margin 
over  the  price  at  the  farm ;  and 

Whereas  a  wide  spread  of  15  to  20  cents  between  cash  wheat  and  futures 
throughout  the  marketing  season  of  1920-21  existed  and  was  caused  either 
by  the  unprecedented  export  demand  or  heavy  pressure  on  futures,  or  both ; 
and 

Whereas  the  organization  of  the  expoi't  trade  and  all  the  conditions  connected 
with  the  export  of  grain  by  American  exporters  and  the  purchase  thereof  by 
foreign  Iniyers  are  of  vital  interest  to  American  farmers  and  consumers :  There- 
fore be  it  i 

Resolved,  That  the  Federal  Trade  Commission  be,  and  hereby  is,  authorized 
and  directed  to  immediately  investigate,  beginning  with  the  harvest  of  the  1919 
grain  crop,  the  margins  V?^tween  farm  and  export  prices;  the  freight  and  other 
costs  of  handling;  the  profits  or  losses  of  the  principal  exporting  firms  and  cor- 
porations and  their  subsidiary  or  allied  companies  and  firms :  all  the  facts  con- 
cerning market  manipulations,  if  any,  in  connection  with  large  export  transac- 
tions, or  otherwise ;  the  organization,  ownership,  control,  interrelationship, 
foreign  sub.sidiaries,  agencies,  or  connections  of  the  concerns  eugaged  in  the 
e:4i)ort  of  graiii.  including  the  extent  of  their  control  of  the  facilities  used  bv 
them  ;  the  organization,  methods  of  operation,  and  agencies  used  by  foreign 
buyers  of  grain  in  this  country ;  and  other  data  affecting  the  demand  for,  and 
foreign  disposition,  movement,  and  use  of  American  exported  grain ;  and  report 
its  findings  and  recommendations  thereon  as  promptly  as  the  various  phases 
of  the  work  are  concluded.  For  the  purpose  of  this  investigation  it  is  requested 
that  the  United  States  Grain  Corporation,  the  Department  of  Agriculture,  and 
other  Government  departments,  and  the  United  States  Food  Administration 
make  available  all  the  pertinent  records  from  these  several  departments  and 
organizations  for  the  use  of  the  commission. 

The  language  of  the  above  resolution  is  very  comprehensive  and 
includes  all  phases  of  the  export  grain  business  as  well  as  certain 
aspects  of  the  domestic  grain  business.  The  demand  for  the  inquiry 
was  the  result  of  an  unprecedented  decline  in  the  prices  of  the 
principal  agricultural  products  at  a  time  when  the  quantity  of  ex- 
ports of  certain  products,  particularly  wheat,  was  unusually  large. 

1  Subsequent  to  the  presentation  of  this  report  to  Congress  in  manuscript,  a  few  minor 
changes  in  text  and  figures  were  made  in  the  copy  submitted  to  the  printer. 


2  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

Section  2.  Scope  of  inquiry. 

In  order  that  the  facts  concernin<^  the  more  important  phases  of 
the  export  grain  business  might  be  made  available  to  the  Senate  and 
to  the  public  at  the  earliest  possible  date,  the  commission  divided 
the  inquiry  into  several  parts,  and,  in  response  to  the  direction  of  the 
Senate,  as  expressed  in  the  resolution  directing  this  inquiry,  the  com- 
mission is  reporting  in  this  volume  the  facts  covering  the  costs, 
margins,  and  profits  of  exporting  firms  and  corporations,  including 
their  subsidiary  and  affiliated  concerns,  the  organization,  ownership, 
control,  and  interrelationships  of  concerns  directly  or  indirectly  con- 
nected with  the  export  grain  trade,  and  such  information  as  was  ob- 
tainable in  this  country  concerning  the  agencies  used  by  foreign 
buyers  of  grain  in  the  United  States.  Information  regarding  the 
margin  between  the  farm  and  export  prices,  the  ownership  and  con- 
trol of  facilities  used  bj^  companies  and  firms  connected  Avith  the  ex- 
port grain  business;  conditions  of  competition  and  other  pertinent 
data  "  affecting  the  demand  for,  and  foreign  disposition,  movement, 
and  use  of  American  exported  grain  "  will  be  presented  in  a  later 
volume. 

Section  3.  Sources  of  information. 

The  information  presented  in  this  report  concerning  the  costs, 
margins,  and  profits  of  exporters  was  obtained  directly  from  the 
books  of  the  companies  by  examiners  of  the  commission.  As  a  rule, 
officials  of  the  companies  readily  granted  access  to  the  necessary 
books  and  records  and  greatly  facilitated  the  work  by  their  prompt 
cooperation.  The  data  covering  the  organization,  ownership,  con- 
trol, and  interrelations  of  concerns  connected  with  the  export  grain 
trade  was  secured  by  reports  made  in  prescribed  form  by  the  com- 
panies and  firms  engaged  in  the  various  phases  of  the  trade.  The 
situation  with  respect  to  the  organization,  methods  of  operation,  and 
agencies  used  by  foreign  buyers  of  grain  in  this  country  was  ob- 
tained from  the  above-mentioned  reports,  from  interviews  with  rep- 
resentatives of  foreign  houses  and  well-informed  American  exporters 
and  other  persons  conversant  with  the  conditions,  from  an  exami- 
nation of  the  correspondence  files  of  the  above-mentioned  concerns, 
and  from  official  documents  of  various  countries. 

The  facts  regarding  the  United  States  Grain  Corporation  and  its 
predecessor,  the  Food  Administration  Grain  Corporation,  were 
either  furnished  by  officials  of  the  former  organization  or  were  se- 
cured directly  from  their  records  by  examiners  of  the  commission. 
Valuable  general  information  was  secured  from  the  United  States 
Departments  of  Agriculture,  Commerce,  State,  and  Treasury,  and 
from  the  Joint  Commission  of  Agricultural  Inquiry. 


CHAPTKr    IT. 

PRODUCTION  AND  EXPORTS. 

Section  1.  World  supply  of  wheat. 

Production  or  prtxcipai.  cot  xtrtes.— An  imclerstanclin£r  of 
chanires  in  wheat  pricos  requires  consideration  of  tlie  economic  fac- 
tors which  enter  into  the  statistical  position  of  the  wheat  trade. 
In  tliis  connection  it  is  important  first  to  frive  attention  to  the  matter 
of  supply.  Fluctuations  in  the  quantity  of  wrain  produced  in  dif- 
ferent parts  of  the  world  greatly  influence  the  export  movements  and 
prices. 

The  size  of  the  wheat  crops  produced  in  the  different  wheat-pro- 
ducing countries  is  of  particular  interest  on  account  of  the  fact  that 
wheat  is  irroAvn  in  larcre  quantities  in  so  many  countries.  In  1921. 
for  example,  the  world  crop  is  estimated  at  2,900.148.000  bushels. 
This  quantity  was  produced  in  33  different  countries.  It  is  difficult 
to  secure  accurate  statistics  of  the  Avorld  wheat  crop  promptly  be- 
cause, on  account  of  difference  in  climatic  conditions,  wheat  is  har- 
vested in  every  month  of  the  year  in  some  one  of  the  important 
wheat-producing  countries.  In  the  United  States  the  wheat  harvest 
begins  in  May  in  Florida  and  southern  Texas  and  ends  in  August 
in  North  and  South  Dakota. 

The  most  accurate  estimates  of  the  Avorld's  production  published 
in  this  country  are  those  of  the  T^'nited  States  Department  of  Agri- 
culture. The  following  table  shows  the  world's  production  of  wheat 
and  the  quantity  and  pro])ortion  produced  in  the  Ignited  States  nnd 
Canada,  as  renorted  bv  the  United  States  Department  of  Agricul- 
ture for  the  period  1910-1921 : 

Table  1. — EHtimntcd  rcorlrVs  production  of  u-Jicat.  and  the  rjiinntity  nnd  propor- 
tion produced  Tyy  the  United  States  and  Canada,  1910-1921} 

[In  thousands  of  bushels.) 


Production. 

Percentage  of  total. 

Year. 

World.2 

United 
States. 

Canada. 

United 
States. 

Canada. 

1910 

3, 575, 055 
3, 551, 795 
3,791,951 
4, 127, 437 
3,.5&5,916 
4,127,685 
3,701,333 
2, 007, 886 
2, 500, 639 
2,742,639 
2, 867, 864 
2, 990, 148 

6.35, 121 
621,338 
730, 267 
763. 380 
891,017 
1,02.5,801 
6.36.318 
6;{6, 6.55 
921,438 
968, 279 
8.3.3, 027 
791,893 

132.019 
2:30,  924 
224,  1.59 
231, 717 
161,280 
393,543 
262, 781 
233, 743 
189,075 
193, 260 
263, 189 
300,8.58 

17.8 
17.5 
19.3 
18.  5 
24.9 
2J.9 
17.2 
31.7 
36.  9 
35.  3 
29.  0 
20.6 

3.7 

191 1 

6.5 

1912 

.5.9 

1913.    ... 

.5.6 

1914 

4.5 

1915 

9.5 

1916 

7.  1 

1917 

11.6 

1918 

7.6 

1919 

7.1 

1920 

9.2 

1921 .   .              

10.0 

'  U.  R.  Dcnartment  of  .\^riculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Jan.  28,  1922. 
'  Statistics  incomplete  since  1916. 

106205°— 22— 3 


4  METHODS   AND   OPEPvATIONS   OF   EXPORTERS. 

Tlie  above  table  shoAvs  that  during  the  period  1910  to  1921  the 
world  i:»roduction  fluctuated  from  a  minimum  of  2,007,880,000  bush- 
els in  1917  to  a  maximum  of  4,127,685,000  bushels  in  1915;  while 
the  maximum  production  in  both  the  United  States  and  Canada  oc- 
curred in  this  same  year,  the  minimum  was  in  1911  for  the  United 
States  and  in  1910  "for  Canada.  The  1913  world  production  was 
nlmost  equal  to  the  1915  maximum,  being  4,127,437,000  bushels.  In 
the  United  States  1919  was  the  year  of  next  highest  production,  when 
the  total  was  968,279,000  bushels. 

The  world's  production  has  been  gradually  increasing  each  year 
since  1917,  the  year  of  minimimi  production,  until  it  reached  2,990,- 
148,000  bushels  in  1921.  This  total  production,  however,  was  still 
much  below  the  average  of  3,726,431,000  bushels  per  year  for  the 
five-year  period  1910-1914.  The  smaller  world  total  since  1916  Avas 
due  to  the  absence  of  Russian  statistics  and  to  a  decline  in  the  pro- 
duction for  other  European  countries. 

During  the  12-year  period,  1910-1921,  the  United  States  main- 
tained the  leading  position  as  a  wheat-raising  country.  Its  propor- 
tion of  the  total  crop  ranged  from  about  17^  to  practically  25  per 
cent  from  1910  to  1915,  and  to  almost  37  per  cent  in  1918  when  Rus- 
sian statistics  were  not  available.  For  the  entire  period  its  produc- 
tion averaged  788.000,000  bushels  per  year,  or  23.9  per  cent  of  the 
aggregate  quantity  of  wdieat  harvested  for  which  statistics  are  avail- 
able. In  the  same  period  the  Canadian  production  increased  from 
less  than  4  per  cent  of  the  world  total  in  1910  to  over  11  per  cent  in 
1917.  Beginning  with  1917  the  United  States  and  Canada  combined 
produced  from  about  37  per  cent  to  over  44  per  cent  of  the  world 
total,  excluding  fiussia.  Appendix  Table  1  shows  the  estimated  pro- 
duction by  principal  countries  for  the  period  1910-1921. 

Demand  for  wheat  and  wheat  flour. — All  of  the  large  wheat- 
producing  countries,  after  supplying  their  domestic  demands,  have 
a  surplus  available  for  export  to  supply  the  demands  of  consumers 
in  countries  producing  either  no  wheat  at  all  or  less  than  their 
domestic  demands.  For  the  last  12  years  the  principal  wdieat-pro- 
ducing  countries  have  exported  from  one-half  to  three-quarters  of  a 
billion  bushels  of  wheat  annually.  The  foreign  demand  for  this 
wheat  is  reflected  in  the  imports  of  countries  importing  wheat  and 
flour. 

TJie  principal  countries  importing  wheat  and  flour  are  the  United 
Kingdom,  France,  Italy,  and  the  Netherlands.  The  following  table 
shows  the  quantity  of  wheat  and  flour  imported  by  each  of  these 
countries  and  by  all  other  countries  and  the  per  cent  each  bears  to 
the  total  imports  by  all  countries  for  the  10  years  1910-1919 : 


PRODUCTION  AND  EXPORTS. 


Table  2. — Quantity  of  wheat  and  the  wheat  equivalent  of  wheat  flour  imported 
by  the  principal  importing  countries,  1910-1919.^ 

[In  thousands  of  bushels.] 


Year. 

United  Kingdom. 

France. 

Italy. 

Quantity. 

Per  cent. 

Quantity 

Per  cent. 

Quantity. 

Per  cent. 

1910 

221.232 
207,919 
229, 160 
22G,  938 
218.025 
191,054 
211,830 
206,255 
175, 460 
178, 543 

33 
29 
33 
29 
41 
37 
38 
42 
34 
35 

23,960 

79, 695 
26,698 
57, 669 
65, 598 
76,776 
106,448 
87, 517 
72,627 
86,630 

3 

11 
4 
7 
12 
15 
19 
18 
14 
17 

45,322 
43,383 
6.5,914 
66,6,35 
37,399 
83,159 
74,088 
77, 249 
78,671 
95, 503 

7 

1911 

6 

1912 .          .       . 

10 

1913 

9 

1914 

7 

1915 

16 

1916 

13 

1917 

16 

1918 

15 

1919 

18 

206,643 

34 

68,362 

12 

66,732 

11 

Year. 

Netherlands. 

Other  countries. 

Total. 

Quantity. 

Per  cent. 

Quantity.    Per  cent. 

Quantity. 

Per  cent. 

1910 

80,946 
68, 657 
75,018 
89, 534 
57, 951 
28,766 
30,242 
12,575 
2,245 
18,259 

12 

10 
11 

12 
11 
5 
5 
3 
1 
4 

302,535 
321, 343 
295,685 
334,460 
156, 645 
140,366 
137,686 
105,029 
188, 959 
134, 552 

45 

44 

42 

43 

29 

27 

25- 

21 

36 

26 

673,995 
720, 997 
692, 475 
775,236 
535, 618 
520, 131 
560, 292 
488,625 
517,962 
513, 487 

100 

1911 

100 

1912 

100 

1913 

100 

1914 

100 

1915 

100 

1016 

100 

1917 

100 

1918 

100 

1919 

100 

Average  importation 

46,419 

8 

211,726 

35 

599,882 

>  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920. 

The  United  Kingdom  is  by  far  the  largest  importer  of  wheat  and 
flour,  and  furnished  a  market  during  tlie  10-year  period  for  from 
30  to  40  per  cent  of  all  the  wheat  and  flour  sold  outside  of  the  country 
in  which  produced.  The  largest  imports  were  recorded  for  1013, 
when  the  total  was  775.236,000  bushels,  of  which  the  United  Kingdom 
took  226,938,000  bushels,  or  29  per  cent.  The  smallest  annual  total 
Avas  shown  for  1917,  when  the  total  imports  of  all  countries  were 
only  488,625,000  bushels,  of  which  the  United  Kingdom  took 
206,255,000  bushels,  or  42  per  cent.  The  average  annual  imports  for 
the  10-ycar  period  Avere  nearly  600,000,000  bushels,  of  which  206,- 
643,000  bushels,  or  34  per  cent,  went  to  the  United  Kingdom.  Three 
other  European  countries  importing  wheat  and  flour  in  considerable 
quantities  were  France,  Italy,  and  the  Netherlands.  These  three  coun- 
tries imported  from  22  to  39  per  cent  of  the  total  imports  of  wheat^^and 
flour  for  all  countries  during  the  10-year  period.  Their  annual 
average  for  the  period  was  31  per  cent.  Combining  the  four  Euro- 
pean countries  in  the  above  table  shows  that  they  imported  from 
55  to  79  per  cent  of  the  total  imports,  while  their  average  for 
the  period  was  65  per  cent. 

Section  2.  World  supply  of  rye. 

Production  of  principal  countries. — Rye  is  used  largely  for 
bread-making  purposes  in  several  countries  of  the  world,  particu- 


6 


METHODS    AND    OPERATIONS    OF    EXPORTERS. 


larly  in  Kuropc.  It  is  normally  ])ro(liic('d  throughout  the  world  in 
somewhat  larger  quantities  than  barley.  Quantity  production  of 
rye  is  not  nearly  so  widespread  as  is  that  of  wheat  and  barley. 
Normally  about  70  per  cent  of  the  world's  total  rye  crop  is  produced 
in  European  Kussia  and  the  territory  comprised  in  old  (jrermany. 
No  reliable  estimate  of  Russian  production  has  been  available  since 
191G.  (jerman  estimates  are  lacking  for  1917  and  1918,  and  that 
country's  production  for  the  years  1919-1921  has  been  only  about 
one-half  of  normal. 

The  following  table  gi^'es  the  best  available  estimates  of  the  w^orld's 
production  of  rye,  together  with  the  quantity  and  proportion  pro- 
duced by  the  United  States  for  the  12-year  period  1910-1921. 


Table  3.— Estimated  world's  production  of  rye  and  the  quantity  and  proportion 
produced  by  the  United  States,  1910-1921} 

[In  thousands  of  bushels.) 


Year. 

World. 

United  States. 

Quantity. 

Per  cent. 

1910       

1,673,473 
1,753,933 
1,886,517 
1,880,387 
1, 596, 882 
1,577,490 

34, 897 
33,119 
35, 664 
41,381 
42,  779 
54, 050 

2.1 
1.9 
1.9 
2.2 
2.7 
3.4 

1911 

1912     

1913 

1914 

1915 

Year. 


1916 
1917 
1918 
1919 
1920 
1921 


World.2 


1, 432, 786 
459, 356 
562,536 
3638, 745 
8  596,845 
'771,779 


United  States. 


Quantity.  Per  cent 


48, 862 
62,933 
91,041 
75,4N3 
60, 490 
57,918 


3.4 
13.7 
16.2 
11.8 
10.1 

7.5 


1  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Mar.  18, 1922. 

2  Statistics  incomplete  since  1916. 
'25  countries. 

'22  countries. 

The  above  table  shows  that  from  1910  to  1916  the  w'orld's  j^earlj 
production  of  rye  has  been  comparatively  uniform,  ranging  from 
about  1,433,000,000  bushels  in  1916  to  approximately  1,886,000.000 
bushels  in  1912.  With  figures  missing  from  Russia  and  Germany 
in  1917  and  1918,  the  world's  reported  rye  production  estimates 
dropped  to  459,000,000  bushels  and  563,000,000  bushels,  respectively, 
for  these  years.     (See  Appendix  Table  2.) 

For  the  12-year  period  1910-1921  the  rj^e  production  in  the  United 
States  has  ranged  from  a  minimum  of  about  33,000,000  bushels  in 
1911  to  a  maximum  of  over  91,000,000  bushels  in  1918.  The  propor- 
tion of  the  world's  crop  of  vye  produced  by  the  United  States  in 
normal  times  has  been  comparatively  small,  ranging  from  not  (juite  2 
per  cent  in  1911  and  1912  to  less  than  3^  per  cent  in  1915  and  1916. 
For  the  three-year  period  1919-1921  the  proportion  produced  by  the 
United  States  Avas  considerably  more  than  normal,  it  being  about 
10  per  cent  of  the  reported  world's  crop. 

The  United  States  is  shown  as  producing  a  still  larger  proportion 
for  the  years  1917  and  1918.  This  is  largely  because  estimates  are 
lacking  from  the  two  countries  that  usually  produce  about  70  per 
cent  of  the  crop. 

Demand  for  rye. — The  demand  for  rye  is  largely  confined  to  the 
countries  in  which  it  is  grown,  very  little  of  it  entering  into  the 
export  trade.     Prior  to  1914  Germany  was  the  largest  exporter  of 


PRODUCTIOlSr   AND   EXPORTS.  7 

rye.  Xext  in  importance  were  Russia  and  the  Xetlierlands.  These 
tiiiee  countries  combined  exported  92  per  cent  of  the  total  rye  ex- 
ports by  all  countries  from  1911  to  1913.  Since  1913  export  statis- 
tics for  Germany  are  not  available  and  the  Netherlands  exports  have 
dropped  to  a  negligible  quantity.  Russian  exports  dropped  from 
an  average  annual  export  for  the  three  years  1911-1913  of  34,921,000 
bushels  to  12.315,000  bushels  in  1916,  since  when  statistics  are  not 
available.  Prior  to  1914  the  exports  of  rye  from  the  United  States 
were  negligible.  Since  that  date  thev  have  increased  from  8,158,000 
bushels  in  1914  to  more  than  40,000,000  bushels  in  1919.  Since  1917 
the  United  States  has  supplied  the  bulk  of  the  foreign  import  de- 
mand for  rye. 

The  foreign  demand  for  r^^e  as  reflected  in  the  imports  for  all 
countries  is  principally  in  Finland,  Norway,  Sweden,  Denmark,  and 
the  United  Kingdom.  The  following  table  shows  the  imports  by 
countries  for  the  years  1911  to  1918 : 


Table   4. — (juantity   of   rye   imported    by   the   principal   importing   countries, 

1911-1918.' 

Iln  thousands  of  bushels.] 


Year. 


United 
Kingdom. 


1911 

1912 

191.3 

1914 

1915 

1916 1 

1917 

1918 


2,343 
1,965 
2,276 
2,073 
1,4.36 
2,054 
5, 353 
5,300 


Norway. 


11,305 
9, 168 

11,088 
8,128 
7,885 
7,329 
5,095 
3,095 


Sweden. 


2,153 

4,708 
4,446 
2,586 
1,986 
1,168 
461 
138 


Nether- 
lands. 


33,083 

27,714 

32,273 

17, 539 

2,232 

1,156 

356 

751 


Finland. 


17,730 
12,873 
15,813 
9,898 
13,425 
12, 639 


Denmark. 


7,746 
8,170 
9,846 
5,701 
2,757 
2,3.50 
443 
41 


Other 
countries. 


44,094 

28, -375 

38, 825 

8,085 

134 

86 

1,762 

5,605 


Total. 


118,454 
92,973 

114,567 
54,010 
29,855 
26,782 
13,470 
14,930 


lU.  S.  Department  of  Agriculture  Yearbooks,  1912-1920. 

Prior  to  1917  Finland  was  the  largest  importer  of  rye  excepting  the 
Netherlands,  whose  imports  were  Jargely  for  reexport.  Since  1916 
statistics  showing  Finland's  imports  are  not  available,  while  the 
Netherlands  imports  have  dropped  perceptibly.  The  imports  of  the 
United  Kingdom,  while  comparatively  small,  are  becoming  more  im- 
portant. Thev  fluctuated  from  about  1,436,000  bushels  in  1915  to 
5,350,000  bushels  in  1917. 

Section  3.  World  supply  of  barley. 

Productiqx  of  principal  countries. — Barley  is  about  as  widely 
grown  as  wheat,  but  the  quantity  produced  throughout  the  world, 
broadly  speaking,  is  only  a  little  over  one-third  that  of  wheat.  In 
the  United  States  the  barley  crop  averages  about  one-fourth  as  much 
as  the  wheat  crop.  It  must  be  remembered  that  the  world  production 
estimates  are  not  absolutely  comparable,  since  the  number  of  coun- 
tries reported  varies  somewhat  from  year  to  year.  Normally  from 
33  to  36  countries  are  reported.  In  the  war  years  1917  and  1918 
estimates  were  not  available  from  several  of  the  war  countries.  That 
probably  accounts  for  a  large  part  of  the  decline  in  world  estimates 
for  those  years,  although  world  production  must  have  been  actually 
less  at  that  period  because  in  some  of  the  nonreporting  war  coun- 
tries production  certainly  was  much  below  normal. 


8 


METHODS  AND   OPERATIONS   OF   EXPORTERS. 


The  following  table  gives  the  best  available  estimates  of  the 
world's  production  of  barley,  together  with  the  quantity  and  pro- 
jDortion  produced  by  the  United  States,  for  the  12-year  period 
1910-1921 : 


Table  5. — Estimated  world's  production  of  "barley  and  the  quantity  and  pro- 
portion produced   hy   the    United   States,   1910-11)21.^ 

|In  thousands  of  bushels.] 


World. 

United  States. 

Year. 

World. 

United   States. 

Quantity. 

Percent. 

Quantity. 

Per  cent. 

1910 

1,388,734 
1,373,286 
1,466,977 
1, 650. 265 
1,463,289 
1, 522, 732 

173, 832 
160, 240 
223, 824 
178, 189 
194,953 
228, 851 

12.5 
11.7 
15.3 

10.8 
13.3 
15.0 

19)6 

1,  .529, 031 
931,313 
1,069,944 
2  972, 937 
3  1,145,476 
2  968,  914 

182,309 
211,759 
256, 225 
147, 608 
189, 332 
151, 181 

11.9 

1911 

1917 

22.7 

1912 

1918 

23.9 

1913 

1919 

15.2 

1914 

1920 

16.5 

191o 

1921 . 

15.6 

1  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Mar.  18, 1922. 
233  countries. 
'36  countries. 

The  above  table  shows  that  from  1910  to  1916,  as  was  the  case 
with  rye,  the  world's  yearly  production  of  barley  was  comparatively 
uniform,  ranging  from  about  1,373,000,000  bushels  in  1911  to  about 
1,650,000,000  bushels  in  1913.  The  reported  production  for  the  years 
1917  to  1921  was  about  two-thirds  the  normal  average.  This  reduc- 
tion was  caused  by  war  conditions  which  reduced  production  and  pre- 
cluded the  securing  of  accurate  crop  estimates  from  some  countries. 
(See  Appendix  Table  3.) 

For  the  12-year  period  1910-1921  the  barley  production  in  the 
United  States  ranged  from  a  minimum  in  1919  of  about  148.000,000 
bushels  to  a  maximum  of  over  256,000,000  bushels  in  1918.  Leaving 
out  of  consideration  the  two  particularly  abnormal  years  of  1917  and 
1918,  the  yearly  proportion  of  the  world's  total  crop  of  barley  pro- 
duced by  the  United  States  throughout  the  perioct  has  been  com- 
paratively uniform,  ranging  from  10.8  per  cent  in  1913  to  16.5  per 
cent  in  1920.  For  the  abnormal  years  of  1917  and  1918  the  proportion 
of  the  reported  world's  total  produced  by  the  United  States  was  over 
20  per  cent  for  each  year. 

Demand  for  barley. — Most  countries  producing  barley  have  a  small 
surplus  above  their  home  demand  for  export.  The  principal  countries 
exporting  barley  prior  to  1914  were  Austria-Hungary,  India,  Nether- 
lands, Rumania,  and  Russia.  No  statistics  are  available  for  Austria- 
Hungary  since  1913  nor  for  Rumania  since  1914,  while  Russian 
exports  dropped  from  168,000,000  bushels  average  for  the  three  years 
1911-1913  to  less  than  half  a  million  bushels  in  1916,  since  when  no 
statistics  from  Russia  are  available.  The  principal  countries  de- 
manding barley  prior  to  1914  were  Germanj^  Belgium,  France,  the 
United  Kingdom,  and  Netherlands  for  reexport.  Germany  was  by 
far  the  largest  importer,  prior  to  1913,  but  since  that  date  no  statistics 
are  available.  The  following  table  shows  the  imports  for  the  prin- 
cipal importing  countries  for  which  statistics  are  available  for  1911 
to  1918,  inclusive; 


PRODUCTION   AND   EXPORTS.  V 

Table  6. — Quantity  of  barley  imported   by  the  principal  iviporting  countries, 

1911-lOlS.' 

[In  thousands  of  bushels.] 


Year. 

United 
Kingdom. 

France. 

Italy. 

Nether- 
lands. 

Other 
coun- 
tries.2 

Total. 

1911 

50,  748 
45, 970 
52, 464 
36,547 
27,976 
36,957 
21,462 
11,725 

9,653 
6, 3<4 
5, 428 
4,9.38 
4,374 

10,  442 
9,440 

11.022 

840 

878 

728 

1,050 

633 

513 

1,530 

7,604 

44,937 

34, 030 

44, 585 

23,994 

6,569 

5,846 

2,360 

136 

211,220 
178,919 
189, 502 
16, 182 
13, 824 
9,790 
7,904 
3,518 

323, 398 

1912 

266, 181 

1913 

292, 767 

1914.                   

82,711 
53,376 

1915 

1916 

63, 548 

1917 

42,696 

1918 

34,005 

1  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920. 


Statistics  incomplete  since  191C. 


Excepting  Germany,  whose  statistics  are  not  available  since  1913, 
the  United  Kingdom  was  the  largest  importer  of  barle3\  Netherlands 
was  also  a  large  importer,  principally  for  reexports  either  in  the 
grain  or  as  barley  malt,  prior  to  191G,  since  when  its  imports  have 
declined  rapidly.  France  and  Italy  are  becoming  more  important 
importers  of  barley. 

Section  4.  World  supply  of  oats. 

Production  of  principal  countries. — Tlie  production  of  oats  in 
the  29  comitries  for  which  statistics  are  available  for  the  year  1921 
was  approximately  2,898,841,000  bushels.  The  quantity  harvested 
by  the  same  countries  in  1920  aggregated  3,497,967.000  bushels,  which 
was  equivalent  to  99  per  cent  of  the  world  crop  for  that  year.  In 
1919  there  were  28  of  these  same  countries  that  produced  2.811,264,000 
bushels  of  oats,  which  was  equivalent  to  98  per  cent  of  the  world 
crop  in  1919.  In  the  five  pre-Avar  years,  1909-1913,  the  oat  crop  for 
27  of  the  29  countries  reporting  in  1920  and  1921  averaged  3,309,- 
025,000  bushels.  This  was  76  per  cent  of  the  world  crop  for  that 
period.  The  following  table  shows  the  world's  production  of  oats 
and  the  quantity  and  proportion  produced  in  the  United  States  for 
the  period  1910-1921 : 


Table  7. — Estimated  world's  production   of  oats  and   tlie   quantity  and   pro- 
portion produced  by  the  United  States,  1910-1921^ 

[In  thousands  of  bushels.] 


Year. 

World. 

United  States. 

Year. 

World. 

United  States. 

Quantity. 

Per  cent. 

Quantity. 

Per  cent. 

1910 

4, 182, 410 
3, SOS, 561 
4,617,394 
4, 697, 437 
4,034,857 
4, 362, 713 

1, 186, 341 
922, 298 
1,418,337 
1,121,768 
1,141,060 
1, 549, 030 

24.8 
24.2 
30.7 
23.9 
28. 3 
35.5 

1916 

4,138,050 
2, 987, 945 
3,115,452 
2, 853, 897 
3,536,880 
2,898,841 

1, 251 ,  837 
1, 592, 740 
1,5.38,124 
1,184,030 
1, 496, 281 
1,060,737 

30.3 

1911 

1917 

53.3 

1912 

1918 

49.4 

1913 

1919 

41.3 

1914 

1920 

42.3 

1915 

1921 

36.6 

"  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Apr.  16,  1922. 

The  world  production  of  oats  fluctuated  during  the  period  1910 
to  1921  from  2,863,897,000  bushels  in  1919,  the  lowest  year's  produe- 


JO 


METHODS   AND   OPERATIOlSrS   OF   EXPOKTKRS. 


tion  shown  in  the  table,  to  4,097,000,000  bushels  in  1918,  the  highest 
year.     (See  Appendix  Table  4.) 

Throughout  the  period  the  United  States  was  by  far  the  leading 
country  of  the  world  in  the  production  of  oats.  In  the  twelve  years 
ending  1921  the  oat  crops  of  the  United  States  ranged  from  922,- 
000,000  bushels  in  1911  to  1,593,000,000  bushels  in  1917,  while  its 
share  in  the  world  crops  varied  from  about  24  per  cent  in  1911 
and  1913,  to  more  than  53  j>er  cent  in  1917.  It  will  be  noted  that 
while  there  was  a  substantial  decrease  in  the  world  crop  subsequent 
to  1916,  in  this  same  i^eriod  the  proportion  produced  by  the  United 
States  was  considerably  in  excess  of  all  other  years,  its  share  in  the 
crop  in  the  last  five  years  averaging  about  44.6  per  cent  as  com- 
pared with  34.2  per  cent  for  the  entire  period.  Germany,  Canada, 
France,  and  the  United  Kingdom  come  next  in  order  among  the 
five  principal  oat-producing  countries.  The  average  annual  pro- 
duction for  the  12-year  period  was  3,770,369,000  bushels,  of  which  the 
United  States  produced  1,288,548,000  bushels,  or  34  per  cent. 

Demand  for  oats. — Prior  to  1914  the  principal  countries  growing 
a  surplus  of  oats  for  export  were  Argentina,  Canada,  Russia,  and 
the  United  States.  The  average  annual  exports  for  all  countries 
for  the  three-year  pre-w^ar  period  1911-1913  was  234,427,000  bushels, 
of  which  Argentina  exported  52,754,000  bushels,  Canada  16,583,000 
bushels,  Russia  65,279,000  bushels,  and  the  United  States  12,592,000 
bushels.  Of  the  remainder,  Germany  exported  30,844,000  bushels  and 
the  Netherlands  33.814,000  bushels,  but  the  exports  from  these  two 
countries  were  largely  reexports.  In  1914  Russian  exports  dropped  to 
14,441,000  bushels  and  since  that  date  no  statistics  are  available. 
Since  1914  Argentina,  Canada,  and  the  United  States  have  been  the 
principal  exporters  of  oats. 

The  principal  countries  in  which  there  is  a  demand  for  export 
oats  as  reflected  in  statistics  of  imports  are  France,  Italy,  Switzer- 
land, and  the  United  Kingdom.  Prior  to  the  war  both  Germany  and 
the  Netherlands  were  considerable  importers  of  oats,  principally  for 
reexport.  The  following  table  shows  the  imports  for  the  principal 
countries  importing  oats  and  oatmeal  for  the  period  1911-1918: 

Table  8. — Quantity  of  oats  imported  bij  the  principal  importing  countries, 

1911-1918.^ 


[In  thousands  of  bushels.] 


Year. 

United 
Kingdom. 

France. 

Nether- 
lands. 

Switzer- 
land. 

Italy. 

Other 
countries. 

Total. 

ion 

04, 870 
04, 924 
64, 470 
52, 905 
59, 165 
48,986 
58, 014 
55,595 

37,316 
14,929 
39,992 
35, 473 
56,610 
72,324 
42, 819 
33,353 

35,689 
51, 304 
38,711 
20,006 
4,332 
4,902 
2,712 
1 

12,586 
12,661 
12,205 
10, 235 
6,913 
7,320 
3,372 
2, 142 

8,960 
10, 8;30 
7,331 

4,  .-49 
27, 047 
38,308 
19,  S02 
19, 258 

77, 169 
78,330 
75,863 
28, 254 
13, 056 
4,841 
5,9S7 
7,741 

236  590 

1912 

232' 978 

1913 

238,572 
151  422 

1914 

1915     .                       

167,723 
176  681 

1916 

1917 

132  706 

1918 

118' 090 

1  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920. 


The  United  Kingdom  was  the  largest  importer  of  oats  every  year 
excepting  1916,  when  France  took  the  lead.    France  was  the  second 


PRODUCTION    AXD    EXPORTS, 


11 


largest  importer  for  all  other  years  except  1912,  when  it  was  third. 
The  Xetherlands  was  an  important  importer  of  oats  prior  to  1915, 
but  the  Xetherlands'  imports  were  largely  reexported.  Switzerland 
furnished  a  steady  market  for  about  1'2,000,000  bushels  of  oats  prior 
to  1914  since  when  its  imports  have  declined  rapidly.  Italy's  de- 
mands, which  were  eight  to  ten  million  bushels  per  year  iwioT  to  the 
war.  had  increased  to  over  38,000,000  bushels  per  year  in  1916,  but  de- 
clined to  a  little  over  19,000.000  bushels  in  1918. 

Section  5.  World  supply  of  corn. 

Productiox  of  principal  countries. — The  production  of  corn  in 
the  19  countries  for  which  statistics  are  available  for  the  year  1921 
is  placed  at  3,701,557,000  bushels.  The  quantity  harvested  by  the 
same  countries  in  1920  aggregated  3.870,155,000  bushels.  This  was 
equivalent  to  93.6  per  cent  of  the  total  world  crop  for  that  year.  In 
1919  there  were  18  of  these  same  countries  that  produced  3,429,815,000 
bushels  of  corn,  which  was  94  per  cent  of  the  world  crop,  and  in  the 
five  pre-war  years  1909-1913  the  corn  crop  for  15  of  the  19  countries 
averaged  3,397.894.000  bushels,  or  87.6  per  cent  of  the  world  total 
for  that  period.  The  principal  corn-producing  countries  Avere  the 
United  States.  Canada,  Argentina.  Austria-Hungary,  Italy,  Yugo- 
slavia, and  Rumania.  The  following  table  shows  the  latest  avail- 
able statistics  on  the  production  of  corn  for  the  world  and  the 
quantity  and  proportion  produced  in  the  United  States  for  the 
years  1910-1921: 

Table  9. — Estimated  worWs  production  of  corn  and  the  quantity  and  propor- 
tion produced  by  the  United  States,  1910-1921} 

[In  thousands  of  bushels.] 


Year. 

World. 

United  States. 

Year. 

World. 

United  States. 

Quantity. 

Per  cent. 

Quantity. 

Per  cent. 

1910 

4,031,630 

2, 886, 260 
2,531,488 
3, 124, 746 
2,446,988 
2, 672,  804 
2,994,793 

71.6 
72.7 
71.5 
68.2 
70.7 
71.3 

1916.  .  .  . 

3,642  103 

2,566,927 
3, 065, 233 
2,502,665 
2,811,302 
3, 208, 584 
3,080,372 

70.5 

1911 

1912 

1913 

3,481,007 
4,371,888 
3, 587, 429 
3,777,913 
4, 201, 589 

1917 

1918 

1919 

1920 

1921 

3, 512, 823 

3, 129, 433 

2  3,649,815 

2  4, 135, 597 

3  3, 701, 557 

87.3 
80.0 
77.0 

1914 

1915 

77.6 
83.2 

>  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Jan.  28,  1922. 
» 19  countries. 
'24  countries. 

The  United  States  maintained  the  position  it  has  always  held  as 
the  leading  country  of  the  world  in  the  production  of  corn.  In  the 
12  years  covered  by  the  table  its  crops  ranged  from  about  2,447,000,- 
000  bushels  in  1913  to  nearly  3.209.000,000  bushels  in  1920,  while  its 
proportion  of  the  world  crop  ranged  from  68.2  per  cent  in  1913  to 
87.3  per  cent  in  1917.  It  will  be  noted  also  that  the  crops  for  this 
country  in  the  last  two  years  were  among  the  largest  in  the  period 
and  considerably  in  excess  of  the  average  for  the  12  years.  The 
total  world  production  of  corn  exceeded  4,000,000.000  bushels  in  four 
different  years  of  the  12-year  period  1910-1921.  The  maximum  pro- 
duction was  reached  in  1912,  when  it  was  nearly  4,372,000,000  bushels. 


12 


METHODS   AND   OPERATTONR   OF   EXPORTERS. 


Tho  minimum  production  was  in  1918,  wlien  it  was  about  3,129,000,- 
000  busliels. 

Appendix  Table  5  shows  the  world  production  of  corn,  by  princi- 
pal producing  countries,  and  other  countries  combined,  by  calendar 
years  1910-1921.  According  to  this  table,  Argentina  was  second  in 
importance  as  a  corn-producing  country  and,  excepting  in  1911  and 
1917,  its  crops  ranged  above  1G0.000,0()0  bushels.  The  largest  crop 
harvested  was  in  1915,  when  the  production  of  338,000,000  bushels 
gave  this  country  its  highest  proportion  of  the  world's  crop. 

Italy  comes  third  among  the  corn-producing  countries  for  which 
statistics  for  the  full  period  are  available.  The  corn  crops  for  this 
country  ranged  from  77,000,000  busliels  in  1918  to  122,000,000  bushels 
in  1915,  the  average  for  the  12  years  being  95,000,000  bushels.  Italy's 
share  in  the  world  crop  varied  from  2.1  per  cent  in  1920  to  3  per  cent 
in  1913,  its  average  for  the  period  being  2.5  per  cent. 

Owing  to  incomplete  reports  for  Eumania  its  corn-crop  statistics 
have  been  included  with  other  countries  in  the  table.  The  statistics 
available,  however,  indicate  that  complete  reports  would  probably 
give  Rumania  third  position  among  the  corn-producing  countries. 

In  the  first  11  years  of  the  period,  1910-1920,  Egypt  had  from  1.4 
per  cent  to  2.1  per  cent  of  the  world  corn  crop,  and  from  1914  to  1920, 
inclusive,  the  corn  crops  of  British  India  were  from  2  per  cent  to  3 
per  cent  of  the  total  world  crops  in  those  years. 

Demand  for  corn. — The  principal  countries  growing  more  corn 
than  is  needed  to  supply  their  own  demands,  as  reflected  in  export 
statistics,  are  Argentina,  British  South  Africa,  and  the  United 
States.  Rumania  and  Russia  also  showed  exports  prior  to  1914, 
but  statistics  of  exports  for  these  tw^o  are  not  available  since  1914. 
Argentina  was  the  leading  exporter  of  corn  except  for  the  two  war 
years  1917  and  1918,  when  the  United  States  took  the  lead.  Argen- 
tina regained  the  lead,  however,  in  1919.  Import  statistics  show 
that  the  principal  corn  importing  countries  are  the  United  King- 
dom, France,  Denmark,  and  the  Netherlands.  The  following  table 
shows  the  quantity  of  corn,  including  corn  meal,  imported  by  the 
principal  importing  countries  for  the  years  1910-1921: 


Table  10.- 


-Quantity  of  corn  imported  by  the  principal  importing  countries, 
1910-1919.'' 


[In  thousands  of  bushels.] 

Year. 

United 
Ivingdom. 

Nether- 
lands. 

France. 

Den- 
mark. 

Other 
countries. 

Total. 

1910                        

73, 487 
77, 449 
88, 166 
97,721 
7.5, 499 
92, 226 
68, 759 
53,  S02 
32,275 
38,987 

21,512 
25,743 
38, 262 
39,674 
25,674 
43, 338 
27, 514 

8,528 
346 

9,635 

15, 355 
19, 742 
23,951 
23, 279 
16,331 
17, 582 
28, 379 
6,349 
6,748 
6,921 

7,217 
11, 085 
13, 809 
15, 938 
10,399 
27,354 
17. 767 

9,508 
105 

ia3,346 
120, 727 
164,927 
161, 203 
54, 552 
57,244 
34, 724 
31,177 
32,  202 
38,477 

220,917 

1911              

2,54, 746 

1912                            

329,115 

1913 

337, 815 

1914                     

182, 455 

1915 

237,744 

1916.            

177, 143 

1917 

109,364 

1918 

71,676 

1919             

94,020 

1  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920. 

The  United  Kingdom  was  the  largest  importer  of  corn  each  year 
covered  by  the  table.    The  second  largest  purchaser,  excepting  Ger- 


PRODUCTION"   AISTD  EXPORTS. 


13 


many  and  Austria-Hunorary,  statistics  for  whose  imports  since  1913 
are  not  available,  was  the  Xetherlands.  France,  Denmark,  and  Italy 
all  purchased  corn  in  considerable  quantities. 

Section  6.  Importance  of  grain  exports. 

Importance  in  foreign  trade. — The  exports  of  grrain  and  prod- 
ucts made  directly  from  ofrain  constitute  an  important  proportion 
of  the  total  value  of  the  domestic  exports  from  the  United  States. 
Since  1910  the  value  of  exports  of  breadstuffs  has  constituted  from 
about  6  to  17  per  cent  of  the  total  value  of  all  domestic  exports. 
The  smallest  proportion  during  that  12-3^ear  period  was  in  1910 
and  the  largest  in  1921.  The  proportion  of  the  total  value  of  do- 
mestic exports  supplied  by  breadstuffs  was  much  larger  during  the 
war  and  post-war  years  than  from  1910  to  1913.  There  was  a  de- 
cline in  both  the  value  and  proportion  for  breadstuffs  in  1916  as  com- 
pared with  1915.  This  decline  was  due  almost  entirely  to  a  marked 
decrease  in  wheat  exports  caused  by  the  small  crop  of  191G.  The 
total  value  of  domestic  exports  and  the  value  and  proportion  sup- 
plied by  breadstuffs  for  the  period  1910-1921  are  shown  in  the 
following  table : 

Table  11. — Total  value  of  domestic  exports  and  of  breadstuffs,  loith  index  num- 
bers based  on  1910  as  100,  and  the  proportion  of  domestic  exports  supplied 
by   breadstuffs,    1910-1921} 


Domestic  exports. 

Breadstuffs. 

Proportion 
of  exports 

Year. 

Value. 

Index 
numbers. 

Value. 

Index 
numbers. 

supplied 
by  bread- 
stuffs. 

1910 

$1,829,022,929 
2, 058, 413, 224 
2,362,696.056 
2, 448, 576, 614 
2, 071, 057. 744 
3, 493, 230, 532 
5, 422, 642, 505 
6,169,617,225 
6,047,874,437 
7,749.815.556 
8,080,480.821 
4,379,023,730 

100 
116 
129 
134 
113 
191 
296 
337 
331 
424 
442 
239 

$109, 093, 689 
135,860,349 
161,672,348 
203, 391, 856 
310,280,873 
527, 886, 907 
471.918,100 
631, 988, 510 
801,497,716 
920,301,977 
1, 079, 107, 701 
•    748,015,627 

100 
125 
148 
186 
284 
484 
433 
579 
735 
844 
989 
680 

6.0 

1911 

6.6 

1912       

6.8 

1913 

8.3 

1914           

15.0 

1915 

15.1 

1916              

8.7 

1917 

10.2 

1918                     

13.3 

1919 

11.9 

1920 

13.4 

1921 

17.1 

1  Monthly  Summary  of  Foreign  Commerce  of  the  United  States,  Bureau  of  Foreign  and  Domestic  Com- 
merce. 

The  total  value  of  domestic  exports  increased  rapidly  and  quite 
uniformly  from  1910  to  1920,  but  there  was  a  sharp  decline  in  1921. 
In  1920,  the  record  year,  the  total  value  of  domestic  exports  was 
about  342  per  cent  greater  than  in  1910,  while  the  1921  value  de- 
clined until  it  was  only  139  per  cent  greater  than  in  1910.  During 
this  period  the  value  of  breadstuffs  exported  from  the  United  States 
increased  even  more  rapidly  than  the  value  of  all  exports.  The 
record  was  also  reached  in  breadstuffs  in  1920,  when  the  value  of 
these  exports  was  889  per  cent  larger  than  for  1910,  while  that  for 
1921  dropped  until  it  was  only  586  per  cent  greater. 

A  noticeable  feature  of  our  foreign  trade  for  1921  was  the  in- 
creased volume  of  exports  over  1920  in  the  case  of  the  leading  agri- 
cultural commodities,  while  the  values  almost  without  exception 
showed  a  marked  decrease  from  the  previous  year. 


14 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


The  sum  of  ?>2  of  tlie  principal  afrricnitural  commodities  enterinj^ 
into  our  export  trade  showed  an  increase  of  27  per  cent  in  quantity 
over  1920,  while  values  showed  a  decrease  of  39  per  cent. 

Exports  of  phincipal  chains. — Wheat,  rye,  oats,  barley,  and  corn 
are  the  principal  jirrains  exported  from  tlie  United  States.  Generally 
speaking  there  lias  been  a  marked  increase  in  the  quantities  of  these 
jrrains  exported  from  the  United  States  since  1910.  Imports  have 
also  been  generally  much  larger  during  the  latter  part  of  that  period. 
Detailed  statistics  of  exports  and  imports  for  the  period  1910-1921 
are  shown  in  Appendix  Table  6.  The  quantity  ancl  value  of  net  ex- 
ports— i.  e.,  exports  less  imports — for  each  of  the  five  principal  grains 
and  products  thereof  are  given  in  the  following  table  for  the  period 
1910-1921 : 


Table  12.- 


-Net  exports  of  grain,  and  products  thereof,  from  the  United  States, 
1910-1921} 


Wheat. 

Rye. 

Calendar  year. 

Bushels. 

Value. 

Bushels. 

Value. 

1910                               

61,059,430 
81,408,498 
106, 466, 609 
153, 697, 001 
230,071,942 
271,652,209 
209,627,269 
132,793,834 
192,621,895 
259,267,508 
268, 272, 431 
328,995,208 

$65, 595, 367 
81,362,436 
106,614,778 
151,051,647 
248,511,830 
373, 866, 410 
301,861,116 
310, 743, 259 
476,811,616 
635,605,175 
737,563,185 
508,747,814 

51,018 
31,436 
601,123 
2,034,321 
8, 158, 407 
13,654,598 
15, 837, 500 
14,688,836 
16, 308, 089 
40, 494, 346 
59, 252, 966 
30,145,645 

$36,359 

1911                     

22,198 

1912                        

344, 659 

1913                 

1,402,180 

1914                        

8, 043, 740 

1915                            

15, 794, 669 

1916                 

19, 3.S0, 293 

1917                            

27, 959, 504 

1918             

31,065,348 

1919               

74,210,710 

1920             

125,977,975 

1921                 

44, 588, 575 

Barley. 

Oa 

ts. 

Calendar  year. 

Bushels. 

Value. 

Bushels. 

Value. 

1910                     

8,262,961 
3, 555, 136 
8,194,936 
12,782,267 
18, 208, 186 
26, 529, 403 
22, 485, 920 
17, 85S,  849 
20,764,017 
39, 003, 636 
17,854,335 
25,834,000 

$4, 705, 321 
2,505,777 
5,810,410 
7, 882, 342 
11,183,382 
19,312,6.83 
19,752,951 
26,207,499 
34,443,229 
56,344,715 
27,165,469 
20,687,056 

2,130,934 

3,607,234 

28,040,997 

» 5, 731, 649 

27,994,295 

108,015,235 

105, 733, 463 

111,632,823 

129, 738, 264 

66,961,275 

9,820,610 

5, 419, 243 

$1,160,516 

1911             

1,821,310 

1912                

11,318,505 

1913      

» 1,206,719 

1914              

18,277,368 

1915                     .* 

61,466,273 

1916      .  ; 

55, 787, 830 

1917               

82,060,145 

1918 

114,443,339 

1919     

57,965,038 

1920                 

9,689,563 

1921  

3,948,975 

Calendar  year. 

Corn. 

Total  5  i 

P'ains. 

Bushels. 

Value. 

Bushels. 

Value. 

1910                 

44,072,209 
63, 522, 250 
31,727,912 
41,940,517 

1,218,624 
43,805,702 
53,610,190 
55, 481, 280 
45,127,684 

4, 854, 523 
14,387,142 
132,161,193 

$29,170,700 
37,733,711 
23,278,738 
24,476,803 
3,&S3,806 
36,846,642 
47, 865, 477 
81,196,548 
86, 189, 283 
18,702,767 
25,645,403 
96, 412, 501 

115, 576, 552 
152, 124, 554 
174,931,577 
204,722,457 
285.651;  454 
463.657,147 
407,294,348 
332,455,622 
404,559,949 
410,581,288 
369,587,484 
522,555,289 

$100,668,263 

1911                        

123,445,432 

1912          

147,367,090 

18:3,606,253 

1914                     

289,900,126 

507,286,677 

1916              

444,647,667 

528,166,955 

1918  

742,952,815 

842,828,405 

1920                 

926,041,595 

674,384,921 

'  Monthly  Summary  of  Foreign  Commerce  of  the  United  States,  Bureau  of  Foreign  and  Domestic  Com- 
merce. 
'  Excess  of  imports. 


PRODUCTION   AND   EXPORTS.  15 

In  the  above  table  the  exports  of  such  products  as  wheat  and  rye 
flour,  rolled  oats,  and  corn  meal  were  reduced  to  their  grain  equiva- 
lent and  included  in  the  totals.  The  quantity  and  value  of  the  ex- 
ports of  wheat  and  its  products  were  larger  each  year  than  those  for 
any  other  of  these  principal  grains  and  their  products.  During  the 
last  three  years,  1919-1921,  such  net  exports  were  very  large.  The 
total  for  1921  reached  a  record  of  almost  329.000,000  bushels,  valued 
at  nearly  $509,000,000.  While  1921  established  the  record  as  to 
quantity,  1920  Avas  the  record  year  as  regards  value,  when  exports 
of  something  over  268,000,000  bushels  Avere  valued  at  more  than 
$737,500,000. 

The  net  exports  of  rye,  barley,  oats,  and  corn  fluctuated  much  more 
widely  during  this  period  than  those  of  wheat.  Next  to  Avheat  the 
net  exports  of  barley  M^ere  more  nearly  uniform,  ranging  from  a 
minimum  of  about  3,555,000  bushels  in  1911  to  a  maximum  of  over 
39,000,000  bushels  in  1919. 

Rye,  oats,  and  corn  show  very  great  fluctuations,  Oats  ranged 
from  net  imports  of  about  6,000,000  bushels  for  1913  to  net  exports 
of  nearly  130,000,000  bushels  in  1918.  The  quantity  of  corn  exports 
varied  almost  as  widely,  its  range  being  from  a  net  export  in  1914 
of  something  over  1,000,000  bushels  to  more  than  132,000,000  bushels 
in  1921.  The  A^ery  large  increases  in  net  exports  of  corn  in  1921  is 
mostl}^  accounted  for  by  large  increases  in  exports  to  Canada,  central 
Europe,  and  the  United  Kingdom.  Rye  net  exports  fluctuated  much 
more  than  any  of  the  others,  the  range  being  from  about  31,000 
bushels  in  1911  to  over  59,000,000  bushels  in  1920. 

Section  7.  Exports  from  the  principal  ports. 

The  bulk  of  the  exports  of  Avheat,  rye,  barley,  oats,  and  corn  for 
the  three-year  period  1919-1921  passed  through  13  ports  of  the 
United  States.  Some  ports  that  were  quite  important  for  one  kind 
of  grain  Avere  unimportant  for  other  grains.  For  example,  Detroit 
has  been  quite  important  as  a  corn  and  oats  shipping  point  for 
export  but  relatively  unimportant  as  regards  the  other  grains  con- 
sidered. While  large  quantities  of  Avheat  Avere  shipped  from  Gal- 
veston during  this  three-year  period,  that  port  was  of  negligible 
importance  as  a  handler  of  the  other  four  principal  grains.  (Appen- 
dix Table  10  shows  the  exports  by  ports.) 

The  leading  wheat  shipping  ports  for  the  period  haA^e  been  Gal- 
A^eston  and  Ncav  Orleans  on  the  Gulf,  Baltimore,  Philadelphia,  and 
New  York  on  the  Atlantic  seaboard,  and  Portland  on  the  Pacific 
coast.  During  the  years  1920  and  1921  there  Avas  also  considerable 
moA^ement  of  wheat  from  the  lake  ports  of  Chicago  and  Duluth- 
Superior. 

The  bulk  of  the  rye  shipments  Avent  from  New  York  and  Balti- 
more. San  Francisco,  Ncav  York,  Baltimore,  and  New  Orleans  AAere 
the  leading  ports  in  the  export  of  barley. 

Considering  the  three  years  1919-1921  as  a  Avhole,  nearly  one-half 
of  the  exports  of  oats  moved  from  New  York.  In  1919  NeAv  Orleans, 
Baltimore,  Philadelphia,  Boston,  and  Detroit  Avere  also  important 
shipping  ports  for  this  grain.  Milwaukee  Avas  the  leading  export 
point  for  oats  in  1921,  nearlA'  tAvo  and  one-half  times  as  much  going 
from  there  as  from  its  nearest  competitor,  NeAA'  Orleans.     For  the 


16  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

whole  period  corn  was  exported  birf^ely  from  Chicago,  Baltimore, 
Detroit,  NeW  Orleans,  and  New  York.  In  1921  Milwaukee,  Philadel- 
phia, and  San  Antonio  were  also  important  export  shipping  points 
for  corn ;  the  exports  from  Milwaukee  Avere  destined  for  Canada  and 
those  from  San  Antonio  for  Mexico. 

Some  very  noticeable  shifts  occurred  in  the  relative  importance  of 
certain  ports  as  grain-exporting  points  during  the  three-year  period 
1919-1921.  For  instance,  the  wheat  exj)orts  from  the  Gulf  ports 
of  Galveston  and  New  Orleans  rose  from  about  80,000,000  bushels 
in  1919  to  oyer  149,000,000  bushels  in  1921,  while  those  from  the 
North  Atlantic  seaboard  ports  of  Baltimore,  Philadelphia,  New  York, 
and  Boston  fell  from  over  105,000,000  bushels  in  1919  to  less  than 
54,000,000  bushels  in  1921. 

This  change  is  probably  largely  accounted  for  by  shorter  interior 
hauls  and  unfavorable  freight  rates  for  the  North  Atlantic  poits 
as  compared  with  the  Gulf  ports.  Portland  wheat  exports  rose  from 
2,500,000  bushels  in  1919  to  37,500,000  bushels  in  1921. 

Relatively  speaking,  the  shifting  in  rye  export  shipments  were 
less  important  than  in  the  case  of  wheat.  However,  the  exports  of 
this  grain  from  the  Gulf  ports  of  New  Orleans  and  Galveston  rose 
from  practically  nothing  in  1919  to  over  2,000,000  bushels  in  1921, 
while  those  from  Philadelphia  dropped  from  over  7,500,000  bushels 
in  1919  to  about  1,000,000  bushels  in  1921  and  New  York  exported  in 
1921  less  than  half  the  quantity  moved  in  1919. 

As  regards  barley  exports,  both  the  Gulf  ports  and  North  Atlantic 
seaboard  ports  declined  in  importance  in  1921  when  compared  with 
1919,  while  the  Pacific  coast  ports  gained.  Barley  shipments  from 
the  Gulf  ports  dropped  from  over  8,000,000  bushels  in  1919  to  about 
1,000,000  bushels  in  1921,  and  those  from  the  North  Atlantic  ports 
fell  from  over  17,000,000  bushels  in  1919  to  about  6,000,000  bushels 
in  1921,  while  those  from  the  Pacific  ports  rose  from  about  6,000,000 
bushels  in  1919  to  over  18,500,000  bushels  in  1921. 

New  Y^ork  exports  of  over  26,500,000  bushels  of  oats  out  of  a  total 
of  about  55,000,000  bushels  in  1919  fell  to  only  a  little  over  300,000 
bushels  in  1921  out  of  a  total  of  3,250,000  bushels.  In  1921  Milwaukee 
exported  over  1,250,000  bushels  of  oats  as  compared  with  none  for 
1919. 

While  corn  net  exports  were  nearly  29  times  greater  in  1921  than 
1919,  some  of  the  ports  showed  much  larger  proportional  gains  for 
1921  than  this  general  increase  would  indicate.  For  instance,  Gal- 
veston shipments  of  corn  increased  from  about  3,000  bushels  in  1919 
to  over  905,000  bushels  in  1921,  and  the  movement  through  San 
Antonio  rose  from  about  103,000  bushels  in  1919  to  nearly  8,000,000 
bushels  in  1921.  Chicago  corn  exports  went  from  about  900,000 
bushels  in  1919  to  nearly  36.000,000  bushels  in  1921.  Baltimore. 
Philadelphia,  Boston,  and  Milwaukee  also  each  made  much  larger 
gains  in  their  corn  exports  for  1921  as  compared  with  1919  than 
the  increase  in  total  exports  would  lead  one  to  expect. 

The  large  increases  in  corn  exports  at  certain  ports  in  1921  over 
1919  do  not  seem  to  have  been  made  by  those  in  one  section  at  the 
expense  of  ports  in  ajiother  section  as  in  the  case  of  wheat. 

Appendix  Table  10  shows  the  number  of  bushels  of  wheat,  rye, 
barley,  oats,  and  corn  exported  for  the  calendar  years  1919,  1920, 
and  1921  through  13  important  ports. 


peoductiojSt  and  exports. 


17 


Section  8.  Proportion  of  grain  exported. 

There  are  no  statistics  which  sliow  the  proportion  of  a  given  crop 
that  is  exported  in  a  particular  year;  even  statistics  of  production 
and  of  reserves  are  estimated.  The  quantities  exported  and  im- 
ported are  secured  from  dechirations  made  at  the  time  of  export  or 
of  import.  While  it  is  not  possible  to  show  the*exact  proportion  of  a 
particular  crop  that  is  exported  in  a  given  year,  the  ratio  of  the 
quantity  exported  in  a  given  year  to  the  estimated  production  for 
that  3^ear  can  be  shown.  The  following  table,  based  upon  net  export 
and  production  statistics,  shows  what  per  cent  the  net  export  of  each 
of  the  five  principal  grains — wheat,  rye,  barley,  oats,  and  corn — 
was  of  the  total  production  of  each  for  the  12-year  period  1910-1921. 

Table  13. — Proportion  of  United  States  net  e-r ports  to  estimated  prodnction  for 
the  five  principal  grains,  1910-1921. 


Year. 

Wheat. 

Rye. 

Barley. 

Oats. 

Corn. 

Year. 

Wheat. 

Rye. 

Barley. 

Oats. 

Com. 

P.ct. 

P.ct. 

P.ct. 

P.ct. 

P.ct. 

P.ct. 

P.ct. 

P.ct. 

P.ct. 

P.ct. 

1910 

9.6 

0.1 

4.S 

0.2 

1.  5 

1916 

32.9 

32.4 

12.3 

8.4 

2.1 

1911 

13.1 

.1 

2.2 

.4 

2.5 

1917 

20.9 

2:3.3 

8.4 

7.0 

1.8 

1912 

14.6 

1.4 

3.7 

2.0 

1.0 

1918 

20.9 

17.9 

8.1 

8.4 

1.8 

1913 

20.1 

4.9 

7.2 

0) 

1.7 

1919 

20.  S 

53.6 

26.4 

5.7 

.2 

1914 

25.8 

19.1 

9.3 

2.5 

« 

1920 

32.2 

98.0 

9.4 

.7 

.4 

1915 

2G.5 

25.3 

11.6 

7.0 

1.5 

1921 

41.4 

52.0 

17.1 

.5 

4.3 

'  Imports  exceeded  exports. 


2  Less  than  one-tenth  of  1  per  cent. 


The  above  table  shows  a  wide  range  in  the  f)roportion  of  the  net 
exports  to  the  estimated  production  for  the  five  principal  grains. 
The  ratio  of  exports  in  a  given  year  to  that  year's  wheat  crop  ranged 
from  a  minimum  of  about  10  per  cent  in  1910  to  a  maximum  of 
a  little  over  41  per  cent  in  1921.  The  proportion  was  in  excess  of 
one-fifth  for  the  entire  period  1913-1921,  and  it  was  particularly 
large  in  each  of  the  last  three  years.  The  proportion  of  rye  ex- 
ports fluctuated  from  a  minimum  of  one-tenth  of  1  per  cent  in 
1910  and  1911  to  98  per  cent  in  1920.  As  in  the  case  of  Avheat  the 
proportion  of  lye  exported  was  very  large  during  the  three-year 
period  1919-1921.  A  large  exporter  of  wheat  and  rye  stated  in 
a  letter  dated  February  25,  1920,  that  "practically  all  the  rye  in 
store  has  been  cleaned  off."  The  proportion  of  barley  and  oats  ex- 
ported during  the  period  1910-1921  was  much  smaller  than  either 
rye  or  wheat.  In  the  case  of  barley  the  equivalent  of  only  2.2  per 
cent  of  the  1911  crop  was  exported,  while  the  maximum  of  a  little 
over  26  per  cent  was  exported  in  1919.  In  1913  the  imports  of 
oats  exceeded  the  exports.  The  proportion  of  oats  exported  has 
never  been  large.  The  largest  net  exports  occurred  during  the  war 
period.  The  proportion  of  the  com  crop  exported  is  comparatively 
small.  In  1914  corn  exports  were  less  than  one-tenth  of  1  per  cent 
of  that  year's  crop,  while  the  largest  proportion,  which  was  for 
1921,  was  only  4.3  per  cent. 

Section  9.  Grades  and  kinds  of  wheat  exported. 

Export  grades. — The  bulk  of  the  wheat  exported  from  the  United 
States  during  the  period  July  1,  1920,  to  December  31,  1921,  was 
No,  2  grade.     July  1,  1920,  practically  marks  the  date  of  resump- 


18 


MKTirODS    AND    OPERATIONS    OF    EXPORTERS. 


tion  of  cxi)()rtiii<!:  I)y  private  coiiconis  I'ollowiTijT  the  decontrol  of  the 
grain  trade  by  the  United  States  Grain  Corporation.  For  the  fiscal 
year  ending  June  ;')0,  1921,  about  80  per  cent  of  the  wheat  exi)orted 
from  the  TTnited  States  was  graded  No.  2,  while  for  the  calendar 
year  of  11)21  ajiproximately  <S3  per  cent  of  the  total  exports  were 
No,  2  grade.  In  both  calendar  and  fiscal  years  the  next  largest 
percentage  of  the  total  was  wheat  sold  on  sample.  It  is  very  ])rob- 
able  that  much  of  the  wheat  sold  on  sample  would  have  been  giT.ded 
No.  2.  Appendix  Table  11  shows  tlie  proportions  of  the  dilferent 
kinds  of  wheat  exported  from,  the  U'.iited  States  during  the  18-jiionth 
period  ending  December  3L  1921.  The  following  table  shows  the 
proportion  of  the  different  grades  exported  from  the  United  States 
for  the  18-month  period  ending  December  31,  1921: 

Table  ]4. — Domestic  exports  of  wheat  from,  the  United  States  ?;7/  grades,  July  J, 
li)20,  to  Decemher  31.  1021.^ 


Grade. 

Bushels. 

Per  cent. 

No  1                                  

13,805,000 

331,898,000 

14,491,000 

404, 000 

53, 195, 000 

3.1 

No  2          .            

80.4 

No  3                               

3.5 

No  4                     

.1 

12.9 

Total          

412, 793, 000 

100.0 

1  U.  S .  Department  of  Agriculture,  Grain  Standards  Division,  Bureau  of  Markets. 

While  the  total  quantities  shoAvn  above  do  not  exactly  agree  with 
the  total  domestic  exports  as  reported  by  the  Bureau  of  Foreign 
and  Domestic  Commerce,  Department  of  Commerce,  for  the  18- 
month  period,  they  furnish  reliable  statistics  showing  the  propor- 
tions of  the  diU'erent  grades  for  almost  413,000,000  bushels  of  wheat. 
Slightly  more  than  80  per  cent  of  the  above  total  was  No.  2  grade, 
almost  13  per  cent  being  sold  on  sample,  while  the  remaining  7  per 
cent  was  almost  all  No.  1  or  No.  3  grade. 

Kinds  of  wheat  expokted. — During  both  the  fiscal  and  calendar 
years  ending  June  30  and  December  31,  1921,  hard  red  winter  Avheat 
was  exported  from  the  United  States  in  larger  quantities  than  any 
other  kind,  and  mixed  wheat  ranked  next.  The  percentage  of  hard 
red  winter  wheat  exported  in  the  fiscal  year  was  almost  48  per  cent, 
while  for  the  calendar  year  it  was  almost  58  per  cent.  The  follow- 
ing table  shows  the  quantities  of  the  different  kinds  of  wheat  ex- 
ported from  the  United  States  for  the  period  July  1,  1920,  to  De- 
cember 31,  1921. 

Table   15. — Domestic   exports   of  wheat  from   the   United    States,    hij    lands, 
July  1,  1920,  to  December  31,  1921^ 


Kinds. 


Bushels. 

Per  cent. 

198,832,000 

50,654,000 

20,737,000 

712,000 

1,229,000 

9, 225, 000 

131,304,000 

48.2 
12.3 
5.0 
.2 
.3 
2.2 
31.8 

412, 793, 000 

100.0 

Hard  red  winter. 
Soft  red  winter. . . 
Hard  red  spring.. 
Common  wliite . . 

White  club 

Durum 

Mixed 


Total. 


*U.  S.  Department  of  Agriculture,  Grain  Standards  Division,  Bureau  of  Markets. 


PRODUCTION    AND   EXrORTS.  19 

Hard  red  winter  wheat,  which  alone  supplied  48  per  cent  of  the 
exports  for  the  18-month  period.  July  1,  15^>20.  to  December  31,  1921, 
is  largely  raised  in  the  States  of  Nebraska,  Kansas,  and  Oklahoma. 
Soft  red  winter  wheat,  which  constituted  a  little  over  12  per  cent 
of  the  total,  is  produced  principally  in  Ohio,  Illinois,  Indiana,  Mis- 
souri. Oklahoma,  and  eastern  Kansas.  Most  of  the  hard  red  spring 
Avheat.  which  furnished  5  per  cent  of  the  total,  is  produced  in  North 
Dakota,  South  Dakota,  and  ^Minnesota.  Durum,  a  varietj^  of  spring 
wheat,  is  almost  all  produced  in  North  Dakota,  South  Dakota,  Min- 
nesota, and  ^Montana.  California,  Washington,  Oregon,  and  Idaho 
produce  nearly  all  of  the  Avhite  club  and  common  white  wheats.  The 
quantities  of  these  last  three  varieties  of  wheat  constituted  a  very 
small  ])roportion  of  the  total  exports  from  the  United  States  during 
the  18-month  period  beginning  July  1,  1920.  Detailed  information 
respecting  tlie  kinds  of  wheat  exported  from  the  United  States 
during  the  18  months  ending  December  31,  1921,  is  given  in  Ap- 
pendix Table  11. 

106205°— 22 4 


Chapter  III. 
EUROPEAN  GOVERNMENT  CONTROL. 

Section  1.  The  Allies'  war  control. 

Governmental  regulation  and  direct  control  of  food  supplies  dur- 
ing and  subsequent  to  the  war  with  Germany  expanded  far  beyond 
that  of  any  earlier  war. 

In  the  wars  with  France  at  the  time  of  the  Revolution  and  the  Na- 
poleonic Era  statutory  legislation  in  England  reached  its  maximum 
up  to  that  date,  and  these  wars  may  be  said  to  have  been  mainly 
conducted  under  acts  of  Parliament  specifically  enacted  for  that 
purpose.  Among  the  numerous  acts  for  the  conservation  of  grain 
supplies  were  those  prohibiting  the  making  of  wines  and  sj)irits  from 
grain  and  flour,  prohibiting  the  making  of  starch,  hair  powder,  and 
blue  from  wheat;  permitting,  and  later  requiring,  bakers  to  make 
bread  with  a  larger  proportion  of  bran  by  mixing  other  grains  or 
potatoes  with  wheat.  Most  of  these  measures  were  repeated  in  the 
recent  World  War,  and  in  addition  many  other  steps  taken,  including 
Government  purchase  and  direct  control  of  important  articles  of 
food,  the  intensive  regulation  of  the  kinds  and  quantities  of  different 
foods  to  be  used,  and  the  fixing  of  prices.^ 

The  Royal  Commission  on  Wheat  Sitpplies. — The  problem  of  food 
supplies  at  the  outbreak  of  the  World  War  was  placed  in  the  hands 
of  various  commissions,  and  in  August,  1914,  there  was  organized  a 
Commission  Internationale  cle  Ravitaillcment  as  the  result  of  an 
agreement  with  the  French  Government  to  assist  in  the  purchase  of 
food  supplies,  munitions  of  war,  and  field  equipment.  The  scope 
of  this  commission  was  later  extended  to  other  allied  Governments. 
Applications  for  permission  to  export  goods  intended  for  allied 
Governments  were  dealt  with  by  this  body.  Exportation  of  food 
was  prohibited,  and  after  a  few  months  the  prohibition  was  extended 
to  feeding  stuffs  for  animals. 

The  Royal  Commission  on  Wheat  Supplies  by  virtue  of  a  royal  war- 
rant of  October,  1916,  was  appointed  to  inquire  into  the  supply  of 
wheat  and  flour  in  the  United  Kingdom ;  to  purchase,  sell,  and  con- 
trol the  delivery  of  wheat  and  flour  on  behalf  of  the  Government; 
and  generalh"  to  take  such  steps  as  might  seem  desirable  for  main- 
taining the  supply.  On  October  27  the  royal  warrant  was  extended 
to  include  other  grains,  and  on  April  25,  1917,  the  terms  were  again 
widened  to  include  the  supply  "  of  wheat  and  all  other  cereals  and 
the  products  thereof,  of  all  pulses  and  the  products  thereof  and 
farina,  and  of  all  substitutes  for  an}'-  such  grain,  pulse,  or  products 
thereof."     Thus,  by  the  spring  of  1917  the  Government  had  become 

1  British  War  Administration,  Ch.  I,  pp.  3-14  ;  Ch.  X,  p.  197. 
20 


EUROPEAN   GOVERNMENT   CONTROL.  21 

resjionsible  for  importino;  wheat,  maize,  barley,  rye,  oats,  peas,  brans, 
and  other  pnlse,  flour,  and  every  kind  of  product  of  a  cereal  charac- 
ter and  all  substitutes  therefor. 

Overseas  organization. — Two  concerns  in  the  United  Kinjrdom, 
with  establisliments  in  foreij^n  markets,  entered  into  voluntary  con- 
trol, and  their  oroanizations  l)oth  in  England  and  abroad  were 
placed  at  the  disposal  of  the  royal  commission  on  a  fixed  basis  of 
remuneration.  Thus  the  commission  at  the  outset  found  itself 
pro\'id.ed  vrith  agencies  in  Canada,  the  United  States,  the  Argentine, 
and  India. 

The  largest  of  the  overseas  organizations  was  the  Wheat  Export 
Co.  (Inc.),  27  Beaver  Street,  New  York,  incorporated  under  the  laws 
of  the  State  of  New  York,  with  its  allied  house,  the  Wheat  Export 
Co.  (Ltd.),  of  Canada,  incorporated  under  the  laws  of  Canada,  with 
headquarters  at  AVinnipeg.  The  wheat  export  companies  were  the 
official  agents  of  the  Governments  of  Great  Britain,  Italy,  and 
France,  and  acted  solely  on  their  belialf  and  for  authorized  gov- 
ernments, taking  no  instructions  excei)t  those  which  reached  them 
from  the  Allies.  They  were  ]:)recluded  from  trading  except  for  or 
at  the  instance  of  the  Governments  concerned. 

The  organization  of  these  same  allied  powers  in  Argentina  was 
styled  the  Comision  Interaliada  para  la  Compra  de  Cereales.  There 
were  a  series  of  problems  in  connection  with  the  ])urchase  of  grain 
in  Argentina,  due  largely  to  the  necessity  for  an  immense  storage 
of  supplies,  the  purchase  of  large  quantities  of  jute,  and  to  labor 
troubles,  which  were  more  acute  in  South  America  than  elsewhere. 
Some  9,000,000  tons  of  all  cereals  were  purchased  through  the  roj^al 
commission's  Argentine  organization.  A  subordinate  agency  was 
set  up  in  Montevideo,  Uruguay. 

In  Australia  the  whole  crop  was  controlled  by  the  Commonwealth 
Government,  wdiich  in  turn  sold  large  blocks  to  the  royal  commission, 
as  agents  for  the  wheat  executive — the  cereal  alliance  of  France, 
Italy,  and  Great  Britain.  In  September,  1916,  it  was  estimated  that 
about  1,600,000  tons  of  old  crop  wheat  were  available  in  Australia. 
Sales  were  subsequently  made  to  the  commission  of  5,415,000  tons. 
During  1918,  125,000  tons  were  dispatched  to  the  United  States  and 
in  1919,  40,000  tons  were  sold  to  the  Government  of  India. 

In  India  the  central  government  at  an  early  stage  of  the  war  took 
steps  to  regulate  the  export  of  Avheat  and  flour.  Although  90  per  cent 
of  the  grain  produced  is  usually  retained  for  home  consumption,  the 
influence  on  internal  prices  of  the  exportable  balance  might  have 
unduly  raised  prices  in  that  empire,  and  under  certain  conditions 
might  have  depleted  the  necessary  supplies.  The  Government  of 
India,  being  reluctant  to  incur  either  risk,  limited  exports  to  specified 
quantities  at  regulated  prices.  A  Avheat  commissioner  was  appointed 
who  was  authorized  to  act  as  correspondent  of  the  royal  commission. 
A  sj^stem  of  internal  control  of  distribution  arose  from  the  original 
necessity  of  regulating  export,  a  measure  which  was  also  applied  to 
rice  and  grain,  with  the  result  that  during  the  grain  famine  of  1919 
the  problem  of  food  supply  Avas  handled  w^ith  success.  Throughout 
the  war  the  range  of  wdieat  prices  in  India  was  maintained  at  a  lower 
level  than  in  any  other  exporting  country  of  the  world. 

South  Africa,  though  a  recognized  importer  of  wheat,  was  able  to 
sell  a  certain  quantity  of  maize,  maize  meal  and  flour,  oats,  and  brans, 


22  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

and  an  ofricial  of  tlie  Union  was  allowed  to  act  as  the  local  correspond- 
ent and  a^ent  of  the  royal  commission. 

'J'liic  WHKAT  ExKcuTivK  AGREKMKNT. — France  and  Italy  on  Novem- 
ber 29,  1916,  joined  witli  the  United  Kin<Td()m  in  what  was  designated 
the  wheat  executive  agreement,  by  which  the  Allies  undertook  to 
work  together  to  impose  domestic  control  and  to  purchase  cereals 
overseas  to  meet  requirements.  Wheat  and  flour  w'ere  scheduled  at 
the  outset,  and  as  time  went  on  practically  all  other  cereals  were  added 
to  the  list.  Payment  was  made  in  the  first  instance  by  the  British 
(iovernment  and  recovered  from  the  allied  powers  as  and  where  the 
Avheat  was  allocated.  Each  ally  assumed  responsibility  for  transport- 
ing its  share  of  wheat,  but  the  wheat  executive  controlled  all  toimage, 
chartered  supplementary  tonnage,  and  was  also  under  obligation  to 
keep  in  view  the  advantage  of  pooling  both  tonnage  and  supplies. 

The  agreement  further  laid  down  the  methods  of  ascertaining  the 
import  requirements  of  each  ally,  of  apportioning  purchases,  and  de- 
termining costs.  On  January  1,  1917,  the  royal  commission  was  in- 
trusted with  the  executive  responsibility  of  carrying  out  the  pur- 
chase and  transport  program  for  France  and  Italy,  and,  with  unim- 
portant exceptions,  was  the  overseas  agency  for  the  two  great  Allies. 
Other  allied  Governments  received  assistance  from  the  wheat  execu- 
tive. Responsibility  for  Greece  was  added  in  April,  1917,  and  Portu- 
gal soon  afterwards,  and  by  June,  1918,  the  wheat  executive  took  over 
the  program  of  the  Commission  for  Relief  in  Belgium.  By  1918 
neutral  countries  sought  to  participate  in  the  new  food  policy,  so 
that  the  wheat  executive  became  virtually  responsible  for  the  cereal 
supplies  of  Norw^ay,  Sweden,  the  Netherlands,  Iceland,  and  Switzer- 
land.   Other  countries  were  also  supplied  with  quantities  of  cereals. 

The  fundamental  principles  upon  which  the  executive  authority  of 
the  instrument  was  based  were  world-wide  supply  and  international 
distribution,  and  unity  of  control  from  the  purchasing  market  to  the 
final  distribution.  Each  party  to  the  agreement  surrendered  any 
claim  to  buy  in  the  cheapest  market. 

The  wheat  executive  completed  its  functions  on  August  21,  1919, 
and  was  succeeded  by  the  consultative  food  committee,  set  up  by  the 
supreme  economic  council,  with  greatly  restricted  powers  and  obli- 
gations.    This  committee  in  turn  came  to  an  end  on  August  30,  1920. 

Section  2.  Decontrol  in  Europe. 

United  Kingdom. — Decontrol  of  the  grain  trade  in  the  United 
Kingdom  took  place  gradually  over  a  period  of  a  year  or  more.  The 
last  articles  to  be  controlled  were  the  first  to  be  decontrolled.  Decon- 
trol of  corn,  barley,  oats,  and  all  other  kinds  of  cereals  and  cereal 
products  was  effected  at  various  dates  by  arrangement  with  the  trade, 
and  stocks  of  the  Royal  Commission  on  Wheat  Supplies  were  sold  to 
the  trade. 

Early  in  1920  the  royal  commission  began  to  discuss  the  subject  of 
imported  flour  wath  the  importers  concerned  and  proceeded  to  end 
control  by  tentative  stages,  which  required  12  months  to  reach  their 
consummation.  In  July,  1920,  it  was  decided  to  stop  buying  flour 
through  the  royal  connnission's  overseas  agencies  and  to  buy  directly 
from  importers  at  home.  In  September  flat-rate  selling  prices  were 
abandoned  in  the  United  Kingdom  and  flours  were  classified  at 


EUROPEAlSr   GOVEENMENT   CONTROL. 


23 


prices  varyinfj  in  parity  with  home-milled  flour.  The  last  purchase 
of  liour  on  Government  account  was  made  October  6,  1920.  On 
December  31,  1920,  the  system  of  sale  according  to  percentages  was 
abandoned  and  on  January  14,  1921,  the  imported  flour  trade  became 
entirely  free. 

Decontrol  of  the  wheat  trade  was  brought  about  by  an  agreement 
with  the  milling  industry  and  the  grain  trade  dated  April  1,  1921. 
A  scheme  of  progressive  decontrol  provided  that  during  April,  1921, 
the  royal  commission  should  retain  undivided  authority  by  guarantee- 
ing the  full  100  per  cent  of  the  millers'  requirements.  In  May  the 
royal  commission  filled  80  per  cent  of  the  millers'  requirements  and 
the  merchants  20  per  cent ;  in  June,  60  per  cent ;  July.  40  per  cent;  and 
August,  20  per  cent.  By  September  1,  1921,  both  the  milling  indus- 
try and  the  grain  trade  had  completely  recovered  their  freedom.- 

The  royal  commission  throughout  the  war  and  for  a  long  period 
after  the  armistice  devoted  great  care  to  conserving  supplies  of  wheat 
and  flour.  The  policy  laid  down  by  the  cabinet  in  March,  1917,  was 
to  hold  a  Government  reserve  of  breadstuffs  equivalent  to  13  weeks' 
consumption.  The  Government  stocks  of  wheat  and  flour  as  wheat 
held  at  port  granaries,  warehouses,  inland  cities,  and  mills,  declined 
from  5,640,000  quarters  on  January  1,  1919  to  the  low  point  of 
1,351,000  quarters  January  1,  1920,  and  then  gradually  rose  to 
1.755,000  quarters  April  1,  1920,  which  was  the  high  figure  until 
September  1,  1920—2,618,000  quarters.  By  January  1,  1921,  the 
stocks  had  increased  to  4,761,000  quarters,  the  largest  quantity  on 
hand  at  the  beginning  of  any  month  since  the  armistice,  with  the 
exception  of  December  1,  1918,  and  January  1  and  February  1,  1919. 
Wheat  stocks  alone  on  January  1,  1921,  were  3,577,000  quarters,  as 
against  only  256,000  quarters  December  1,  1919.  and  January  1,  1920. 
A  comparison  of  the  wheat  stocks  held  by  the  Government  from  the 
low  figure  of  January  1,  1920,  to  August  1,  1921,  in  quarters  and 
equivalent  in  bushels  on  the  basis  of  8  bushels  to  the  quarter,  was  as 
f  ollow^s : 


Date. 

Quarters. 

Bushels. 

Date. 

Quarters. 

Bushels. 

256, 000 

416,000 

456, 000 

041,000 

706,  (XM) 

49^t,  000 

557,000 

1,035,000 

1,815,000 

2,458,000 

2,048,000 
3,328,000 
3, 648, 000 
5,128,000 
5,648,000 
3,992,000 
4,465,000 
8,280,000 
14,520,000 
19,664,000 

1920~November 

3,499,000 
3,508,000 
3,557,000 
2,728,000 
2,036.000 
1,888,000 
1,130,000 
1,074,000 
951,000 
233,000 

27, 992, 000 
28, 064, 000 

December 

1921— January 

28, 456, 000 

21,824,000 
16, 288, OOO 

Maj' 

March 

April 

15,104,000 

July 

May 

9,040,000 

June 

8,592,000 

Julv 

7,608,000 
1,864,000 

August 

The  quantity  of  wheat  on  hand  January  1,  1921 — 3,557,000  quar- 
ters— Avas  not  only  the  largest  for  the  period  covered  by  the  tabula- 
tion, but  was  also  the  largest  for  the  1st  of  any  month  from  Novem- 
ber, 1916,  with  the  exception  of  August,  September,  and  October, 
1917.  The  accumulation  of  Government  wheat  stocks,  August,  1920, 
to  February,  1921,  took  place  at  a  time  when  the  prices  of  M'heat  in 
the  United  States  were  rapidly  declining.     Very  large  purchases  of 


2  Iteport  of  the  Royal  Commission  on  Wheat  Supplies,  Aug.  31,  1921. 


24  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

wheat  were  made  by  the  royal  commission  during  the  months  of  May, 
June,  and  July,  1920.  After  having  bought  so  heavily,  the  royal 
commission,  on  July  29,  suddenly  ceased  l)uying  and  withdrew  from 
the  market.     England  was  then  apparently  "  overbought." 

Julius  H.  Barnes,  former  director  of  the  Ignited  States  Grain 
Corporation,  in  a  statement  before  the  Committee  of  Seventeen  of  the 
American  Farm  Bureau  Federation,  November  5,  1920,  commenting 
on  this  particular  situation,  spoke  as  follows : 

Not  one  of  the  importing  countries  of  Europe  has  been  able  to  return  the  over- 
sea grain  trade  to  private  merchants.  Great  Britain,  France.  Italy,  Belgium, 
Holland,  Germany,  Switzerland,  Spain,  Portugal — all  of  them  make  their 
oversea  purchases  through  official  agents  whose  buying  policies  are  influenced 
by  tinancial  or  other  home  considerations  which  may,  and  often  do,  entirely 
defeat  the  ordinary  considerations  of  supply  and  demand  alone.     *     *     * 

For  instance,  the  largest  over-sea  buyer,  whose  normal  requirements  run  to 
practically  one-half  the  over-sea  purchases  of  wheat,  has  bought  not  a  bushel 
in  America  since  July  29 — over  three  months  ago — its  policy  directed  by  gov- 
ernmental consideration  which  would  not  have  affected  the  usual  import  mer- 
chants abroad.  It  has  abstained  from  purchasing  during  the  period  of  crop 
pressure  here  and  in  Canada.  Fortunately  there  lias  not  been  concerted  action 
among  all  governments,  and  other  importing  countries  have  continued  current 
purchases  to  a  large  aiiiount.  This  particular  importer  has  been  able  to  so 
abstain  because  of  large  purchases  made  in  America  last  May,  .Tune  and  July, 
providing  an  enormous  advance  stock  which  has  carried  it  through  three  months 
and  may  for  some  time  longer.  This  is  a  total  deflection  of  t*e  ojieration  of 
supply  and  demand,  as  usually  interpreted  by  commercial  .iudgment.  The  mer- 
chant opinion  of  the  world,  freely  operating,  would  never  have  dared  accumu- 
late such  a  supply  of  high  priced  wheat  and  there  would  never  have  been  thus 
established  the  price  level  recorded  last  May  and  .Tune,  for  nothing  in  the 
usual  factors  of  supply  and  demand  justified  such  urgent  purchasing. 

Its  harm  has  been  twofold  :  This  inordinate  buying  last  spring,  at  a  time  of 
railroad  congestion,  which  hampered  the  usual  marketing  that  the  price  might 
have  attracted,  created  a  price  level  in  America  that  was  distinctly  disturbing 
to  our  consumers  and  distinctly  deceptive  to  our  growers.  To  the  price  paid  at 
that  time  may  be  attributed,  more  than  to  anything  else,  the  confident  and  mis- 
leading prophecies  of  a  high  wheat  price  level  for  this  1920  harvest,  with  the 
resulting  bitter  disappointment. 

This  over-accumulation  abroad  of  stocks  from  the  old  crop  has  been  especially 
harmful  because  it  resulted  iu  the  withdrawing  from  the  market  during  crop 
moving  pressure  of  a  large  part  of  the  usual  buying  which  would  have  cushioned 
the  decline  in  wheat,  perliaps  inevitable,  along  with  the  downward  tendency 
of  all  commodities. 

The.se  accumulated  stocks  may  perhaps  suffice  to  carry  that  largest  consumer 
into  the  new  movement  of  Argentine,  Australian  and  Indian  wheat. 

Already  the  purchases  of  the  British  government  for  shipment  from  Australia 
and  India  during  the  early  months  of  this  coming  year  are  being  consummated 
at  a  price  level  25c  below  the  present  level  of  the  United  States  and  Canadian 
wheat.  Moreover,  these  very  sales  typify  the  deflection  of  usual  commercial 
laws,  because  they  are  made  preferably  to  the  British  Empire  and  its  allies 
by  official  agencies  of  colonies,  themselves  part  of  that  empire,  and  giving  prefer- 
ential contract  relations  to  the  mother  country. 

France. — On  March  8,  1921,  the  Minister  of  Agriculture  an- 
nounced that  farmers  would  be  permitted  to  have  their  wheat  ground 
at  any  mill  they  chose,  and  that  bakers  might  select  the  mills  from 
which  they  bought  their  flour.  Up  to  this  time  a  rigid  system  of 
districting  the  milling  of  wheat  and  the  supplying  of  bakeries  had 
been  in  force.  Eegulations  as  to  the  price  of  wheat  flour  and  bread 
and  the  amount  of  wheat  substitutes  to  be  used  in  bread  were  not 
abandoned  until  August  1,  1921.^ 


•  Federal  Reserve  Bulletin,  April,   1921. 


EUKOPEAN   GOVERNMENT  CONTROL.  25 

On  September  16,  1921,  the  Minister  of  Finance  published  a  notice 
to  exporters  that  it  had  been  decided  that  the  regfime  of  the  tem- 
porary admission  of  foreign  wheat  would  be  reestablished  under  pre- 
war conditions.  The  pre-war  regime  accorded  free  temporary 
admission  to  wheat  imported  with  a  view  to  reexportation  afteV 
being  manufactured  into  flour  and  other  wheat  products.  Wheat 
products  made  from  wheat  temporaril}^  imported  and  stored  in  cus- 
toms warehouses  within  the  time  limit  allowed  for  reexportation 
was  considered  as  reexported.  Exports  of  flours,  semolinas,  and 
products  made  from  wheat  could  be  made  in  a  cjuantity  corresponding 
to  the  quantity  of  foreign  wheat  exported.* 

A  decree  published  in  the  Journal  Officiel  of  June  17,  1921,  stated 
the  import  prohibition  decreed  on  June  13,  1919,  would  be  lifted  on 
August  1,  1921,  ©n  wheat,  spelt,  and  meslin  (grain  and  flour). 
The  new  import  duty  on  wheat,  spelt,  and  meslin  having  been  fixed, 
importers  were  able  to  start  placing  orders  abroad. 

Ostensibly  the  French  milling  industry  was  fully  released  from 
Government  regulation  about  September  1,  1921,  but  in  practice  its 
activities  are  curbed  in  every  direction  by  restrictive  laws,  and  it  is 
now  said  to  be  facing  the  possible  enactment  of  legislation  regulating 
the  percentage  of  flour  extraction,  and  also  a  special  tax  on  bread. 

The  general  decline  in  wheat  prices  all  OA^er  the  world  was  not 
proportionate!}'  reflected  in  French  flour  prices,  for  the  reason  that 
up  to  about  September  1.  1921,  the  Government  had  controlled  the 
selling  prices  of  wheat,  flour,  and  bread,  and  hj  absorbing  a  con- 
siderable part  of  the  cost  through  what  amounted  to  a  bread  subsidy, 
had  not  only  enabled  but  compelled  the  millers  of  France  to  market 
their  flour  at  prices  considerably  below  the  true  level  of  wheat. 
Only  the  decline  in  wheat  values  prevented  a  sharp  advance  in 
French  domestic  flour  prices  when  Government  control  was  with- 
drawn last  summer. 

French  wheat  supply  is  ample  to  maintain  the  entire  population 
on  a  72  per  cent  extraction  basis,  that  is,  100  pounds  of  wheat  to  yield 
72  ])Ounds  of  flour.  The  1921  French  wheat  harvest  amounted  to 
about  323,000.000  bushels;  adding  carry-over  and  deducting  seed 
requirements,  leaves  about  313,000.000  bushels  for  grinding  during 
the  crop  year.  This  would  yield  68,745,000  barrels  of  flour  on  the 
basis  of  72  per  cent.^ 

Italy. — The  Commissioner  General  of  the  Food  Commissariat, 
with  respect  to  the  possibility  of  freedom  of  trade  in  cereals,  said  in 
March,  1921,  that  the  new  situation  created  by  the  law  of  February 
27,  1921,  respecting  the  reduction  of  the  bread  subsidy  and  the  meas- 
ures to  be  taken  to  meet  it,  would  allow  the  whole  s^'stem  of  supph' 
and  distribution  of  cereals  to  be  reexamined.  "  But,"  he  added, 
"  the  change  from  a  Government  monopoly  to  freedom  of  trade  must 
be  carried  out  graduallj'^  and  cautiously." 

It  was  stated  that  maize  might  possibly  be  freed  from  control 
when  that  year's  crop  was  harvested.  "The  attitude  to  be  adopted 
would  depend  largeh'  on  the  price  of  foreign  grain  and  the  position 
of  the  exchanges."  ® 

*  Commerce  Reports,  Oct.  17.  1921. 

E  Northwestern   Miller,   Mar.   8,   1922. 

«  Board  of  Trade  Journal,  Mar.  31,  1921. 


20  METHODS   AND   OPRKATIONS   OF   EXPORTERS. 

The  GoA-^ernment  issued  decrees  by  which  internal  trade  in  Indian 
corn,  oats,  barley,  and  rye  were  made  absolutely  free,  and  the  im- 
ports from  foreign  countries  were  only  made  subject  to  the  old  duties. 
The  wheat  problem  in  Italy  w'as  somewhat  complicated  by  promises 
(jiv'en  to  wheat  producers  and  consumers.  To  wheat  ])roducers  the 
State  promised  by  decree  of  June  4,  11)2(),  that  the  i)rice  would  be 
Hxed  from  July  1,  1921,  at  125  lire  per  quintal,  with  an  additional 
premium  of  21.5  lire  for  wheat  ])rodu(ed  in  the  southern  Provinces, 
in  the  islands,  and  in  the  territory  formerly  occupied  by  the  enemy. 
If  the  ports  should  be  opened  to  the  free  imports  of  foreign  wheat, 
the  Government  micvht  run  the  risk  of  breaking  its  promise  made  to 
induce  producers  to  sow  large  areas  with  Avheat.  The  price  of  North 
American  wheat  delivered  on  board  vessel  Genoa,  which  had  risen 
from  126  lire  per  quintal  in  September,  1919,  to  the  maximum  of  292 
lire  in  May,  1920,  fell  to  140  in  May,  1921.  Some  quantities  were 
even  bought  at  110  lire,  and  on  June  20,  1921,  the  price  fluctuated 
between  130  and  140  lire.  A  complicated  system  of  variable  duties 
and  bounties  were  therefore  necessary  to  guarantee  to  wheat  pro- 
ducers the  promised  prices. 

The  Government,  therefore,  "  limited  itself  for  the  moment  to  a 
decree,  with  which  they  declared  it  would  accept  up  to  August  31, 
1921,  all  offers  of  wheat  from  internal  producers  at  the  stated  prices 
of  125  lire  per  quintal  in  the  northern  and  central  Provinces,  and 
of  146.50  lire  in  the  southern  and  other  Provinces."  ^ 

Applications  for  temporary  importation  of  soft  and  hard  wheat 
might  be  filled  apparently  by  Italian  flour  millers  and  macaroni 
makers.^  These  applications  could  be  made  either  in  their  own 
name  or  through  some  firm  engaged  in  the  wheat  trade  j^rior  to  the 
war,  addressed  to  the  director  general  of  food  control,  which  would 
forward  them  with  its  recommendation  to  the  Ministry  of  Finance 
for  final  decision.  The  name  of  the  factory  where  the  wheat  was  to 
be  manufactured  had  to  be  specified  in  the  request.  Permits  for  tem- 
porary importation  were  valid  for  four  months  without  monetary 
guaranty.  When  it  was  desired  to  have  this  time  extended  the  re- 
quest had  to  be  presented  before  the  expiration  of  the  allowed  four 
months.  The  exportation  of  bran  was  not  permitted  except  under 
special  license.^ 

The  Italian  council  of  ministers  approved  a  measure  extending 
from  December  31,  1921,  to  March,  1922,  the  period  during  wliich 
wheat  might  be  imported  free  of  duty,  such  suspension  having  been 
in  operation  since  januai^  31,  1915,  by  successive  renew^als.^" 

Belgium. — Licenses  were  not  required  for  the  importation  of 
wheat  into  Belgium  after  August  20,  1921.^^  The  dearth  of  ware- 
housing facilities  for  wheat  caused  a  congestion  at  the  port  of 
Antwerp,  where  numerous  steamers  were  held  up.^^  The  heavy 
influx  of  grains  into  the  port  of  Antwerp  continued  after  restric- 
tions were  lifted  on  trade  in  cereals.  The  six  grain  elevators  worked 
night  and  clay  to  unload  supplies,  which  were  shipped  immediately 
to  the  interior.     The  movement  of  the  port  of  Antwerp  continued 

7  The  Economist,  June  25,  1921. 

8  Report  of  Attach^  H.  C.  MacLean,  Sept.  10,  1921. 
"Commerce   Reports,   Nov.    17,    1921,   p.    419. 

'0  Commerce  Reports,  Nov.   14,  1921,  p.  653. 
^  Commerce  Reports,  Aug.   24,   1921. 
"Commerce  Reports,   Oct,   17,  1921. 


EUROPEAN    GOVERNMENT   CONTROL.  27 

to  show  a  distinct  improvement  over  the  preceding  year.  The  in- 
crease in  the  number  of  entries  during  the  first  three  weeks  of  Oc- 
tober, 1921,  over  a  corresponding  period  in  1920  were  due  chiefly 
to  the  removal  on  September  15  of  the  grain  trade  restrictions.^^ 

XoKWAT. — During  the  autumn  of  1921  the  Norwegian  food  com- 
mission purchased  flour  regularly  in  quantities  sufficient  to  cover 
requirmeents  for  two  months  at  a  time.  "  The  total  imports  of  wheat 
and  wheat  flour  are  understood  to  be  about  the  same  as  before  the 
war."  and  the  importations  of  wheat  flour  decreased  and  those  of 
wheat  increased  proportionately.  "At  present  no  importations  are 
made  of  rye  flour,  the  demand  being  for  rye  grain  only."  ^* 

The  information  available  is  not  clear  as  to  the  present  status 
of  Government  control. 

Spain. — The  further  importation  of  foreign  wheat  into  Spain 
was  prohibited  by  an  embargo  made  effective  November  8,  1921. 
Only  shipments  actually  en  route  were  exempt  from  this  embargo.^^ 
Wheat  imports  during  September,  1921,  were  reported  to  have  been 
unusually  large.  This  influx  of  wheat  led  to  a  decree  of  November 
8,  by  the  terms  of  which  Spain  placed  an  embargo,  effective  imme- 
diatel}^,  on  further  importation. 

The  Government  is  endeavoring,  it  is  said,  "  to  compensate  living 
cost  by  reverting  to  price  regulations  of  certain  food  products  in- 
cluding    *     *     *     wdieat  and  flour." " 

Rumania. — Rumania  and  Russia  prior  to  the  World  AVar  furnished 
a  large  part  of  the  wheat  import  requirements  of  the  other  European 
countries.  Russia  is  not  producing  enough  for  her  own  require- 
ments. Rumania  attempted  Government  control  of  the  1921  crop. 
On  August  15,  1921,  the  council  of  ministers  decreed  that  50  per 
cent  of  the  grain  produced  during  1921  should  be  free  for  export, 
and  it  fixed  the  maximum  price  at  which  the  balance  could  be  sold 
for  domestic  consumption.  The  amount  available  for  export  was 
placed  at  the  disposal  of  a  Government  purchasing  commission, 
which  operated  through  the  village  cooperative  associations.  Prices 
for  agricultural  products  for  sale  on  the  domestic  markets  were  fixed. 
Further  regulation  prohibited  the  private  export  of  wheat,  rye,  and 
hay,  the  State  reserving  to  itself  the  entire  right  of  exportation. 

In  order  to  provide  machinerj^  for  this  control  of  agricultural  pro- 
duction and  exportation  the  Government  made  arrangements  with 
a  numljer  of  financial  institutions  to  procure  for  the  State  the  funds 
necessary  to  purchase  and  to  sell  these  products  abroad.  To  this  end 
a  company  Imown  as  the  Syndex  was  incorporated  with  a  capital 
of  5,000,000,000  lei,  in  which  nine  leading  Rumanian  banks  were 
represented. 

Tlie  peasants,  realizing  practically  no  profit  on  wheat  at  the  maxi- 
mum price  fixed  by  the  Government,  began  using  their  land  for 
other  crops  in  the  autumn,  1921,  sowings. 

The  Syndex  rapidly  fell  into  disfavor.  In  order  to  meet  "  the 
necessity  for  considering  the  needs  of  the  army  "  and  to  counteract 
the  growing  tendency  among  the  j^easants  to  curtail  i)roduction.  the 
ministry  of  agriculture  began  slowl}^  freeing  producing  classes  from 

IS  Commerce  Reports,  Dec.  12,  1921,  pp.  873,  874. 

»*  Northwestern  Miller,  Feb.  S,   1022,     London  date  line,  Jan.  25. 

"  Commei'ce  Ueports,  Nov.  21.  1021. 

"  Commerce  Reports,  Dec.  12,  1921. 


28  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

the  necessity  of  complying  with  the  regulations  of  the  maximum 
price.  By  late  November  the  council  of  ministers  had  issued  three 
or  four  special  decrees  restoring  what  was  called  the  "normal 
regime  "  for  parts  of  the  country  and  for  certain  grains.  On  Decem- 
ber 1  it  was  announced  that,  as  the  producers  of  wheat  and  rye  con- 
tinued to  hide  their  cereals  from  inspectors  and  to  sell  them  at 
exorbitant  prices,  it  had  become  necessary  to  release  these  grains 
from  the  special  regulations  hitherto  imposed. 

Reliable  figures  for  Rumania  cereal  crops  will  probably  not  be  avail- 
able before  the  spring  of  1923,  if  then,  owing  to  a  number  of  causes— 
chiefly  the  inexperience  of  Rumanian  officials  in  dealing  promptly 
with  economic  data  and  the  reluctance  of  the  peasant  to  supply  accu- 
rate information  concerning  the  production  of  his  land  lest  it  mean 
additional  taxation.^'^ 

Germany. — There  are  in  Germany  about  150  importers  of  grain. 
These  importers  have  formed  a  combination,  or  cartel,  and  purchase 
in  foreign  markets  through  a  single  agency.  Details  of  the  organi- 
zation and  methods  of  purchasing  are  not  available. 

In  middle  and  eastern  Europe  the  governments  still  control  much 
of  the  food  supply  and  control  imports  and  exports  cf  food.  In 
Germany  two-sevenths  of  the  wheat  crop  is  taken  at  a  fixed  price  of 
2,300  marks  per  metric  ton.  This  price  is  fixed  until  the  summer  of 
1922.  It  is  about  33  cents  a  bushel,  or  less  than  one-third  of  the 
world  price.  The  German  Government  also  needs  to  import  a  quan- 
tity equal  to  about  two-sevenths  of  the  crop.  It  sells  the  requisi- 
tioned grain  and  the  imported  grain  at  approximately  two-thirds  the 
world  price.  Since  exports  are  prohibited  these  sales  control  the 
German  market.  For  example,  on  October  14,  1921,  requisitioned 
wheat  was  2,300  marks;  the  world  price,  as  indicated  by  price  at 
Rotterdam,  Netherlands,  was  6,160  marks,  and  the  Berlin  price  was 
little  more  than  halfway  between,  or  4,800  marks.  The  farmer  is  al- 
lowed to  sell  the  remaining  five-sevenths  of  the  crop  for  all  he  can 
get,  but  this  is,  of  course,  for  no  more  than  the  price  at  which  the 
Government  sells.  Oats,  barley,  and  rye  are  similarly  controlled  in 
Germany.^® 

An  ordinance  concerning  the  importation  of  rye.  wheat,  and  spelt 
into  Germany,  published  August  13,  1921,  and  effective  August  18, 
1921,  permits  the  importation  of  rye,  wheat,  and  spelt. 

1'  Commerce  Reports,  Feb.  13,  1922. 

IS  G.  F.  Warren,  National  Agricultural  Conference,  Jan.  24,  1922. 


Chapter  IV. 
EXPORT  BUSINESS  AND  METHODS  OF  FOREIGN  BUYERS. 

Section  1.  General  characteristics  of  the  export  grain  business. 

Grain  exportixg  a  complex  business. — The  grain  exporting  busi- 
ness expertly  conducted  calls  for  not  only  knowledge  of  the  technic{ue 
of  exporting  but  also  accurate  information  regarding  the  exchange 
situation,  the  availabilitj^  of  shipping  space,  and  fluctuations  in 
ocean  freights,  the  condition  of  crops  in  all  large  exportmg  countries 
and  importing  countries,  the  supply  available  for  export,  and  the 
stocks  of  grain  in  the  principal  countries.  As  the  grain  exported 
from  the  United  States  is  largely  grown  in  the  interior,  principally 
in  the  Mississippi  Valley  at  long  distances  from  the  seaports,  it  is 
necessary  to  transport  it  in  cars  over  railroads  or  to  utilize  a  combi- 
nation rail  and  water  transportation  before  it  reaches  a  port  for 
ocean  shipment.  The  producer  of  grain  was  not  a  direct  exporter 
prior  to  1921. 

Grain  transportation  and  handling. — The  principal  facilities 
used  to  transport  grain  are  freight  cars,  ships  of  special  construction, 
barges,  lighters,  and  tugboats.  Grain  destined  for  export  is  passed 
through  large  terminal  and  export  elevators,  where  it  is  conditioned 
and  mixed.  Most  grain  is  loaded  on  steamships  from  large  elevators. 
Some  of  them  can  load  a  ship  from  either  side  and  from  one  end. 
The  smaller  seaboard  elevators  have  a  capacity  of  from  1,000,000  to 
1,500,000  bushels  and  the  larger  ones  from  3,500,000  to  4,500,000 
bushels.  A  typical  steamer  cargo  would  be  from  200,000  to  400,000 
bushels. 

Many  of  the  terminal  and  seaport  elevators  are  operated  as  public 
utilities,  but  most  of  the  other  facilities  are  privately  owned.  The 
grain  is  inspected  and  weighed  at  terminal  and  seaboard  markets. 
The  costs  of  freight,  switching,  elevating,  cleaning,  and  insurance 
frequently  equal  the  original  price  of  the  grain  to  the  farmer,  par- 
ticularly in  the  case  of  corn  and  oats  and  the  lower  grades  of  other 
grains.  At  the  eastern  markets  elevation  is  necessary  to  facilitate  the 
loading  process  in  bulk  cargoes,  but  in  some  cases,  particularly  at 
Pacific  coast  ports,  the  grain  must  be  bagged  before  it  is  loaded, 
because  there  are  no  adequate  facilities  at  the  port  of  destination  for 
the  efficient  handling  of  cargoes  in  bulk. 

Orders  and  settlesient. — The  orders  received  from  foi*eign  buj-ers 
usually  specify  the  quantity  of  grain,  particularly  wheat  or  corn,  in 
multiples  of  1,000  quarters,  i.  e.,  480,000  pounds,  which  is  equivalent 
to  8,000  bushels  of  wheat  and  approximately  8,571  bushels  of  corn. 
This  practice  doubtless  originated  in  the  commerce  of  Great  Britain 

29 


30  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

and  has  been  adopted  on  the  European  Continent.  The  orders 
si)eci1'y  the  time  allowed  for  shipment,  Avhich  is  usually  several 
months  later  than  the  order.  Tl;e  port  of  shipment  for  European 
shipments  is  usually  any  port  on  the  Atlantic  coast  or  on  the  Gulf; 
the  delivered  price  is  ordinarily  expressed  in  the  currency  of  the 
country  of  destination,  while  the  port  of  delivery  may  be  specified 
as,  for  examjile,  Ilamburii,  (jermany,  or  the  order  may  read  "  any 
port  in  the  United  Kin<rdom."  The  purchase  price  is  usually  for 
delivery  on  board  steamer  at  port  of  destination,  and  the  exporter 
attends  to  the  ocean  freight  and  marine  insurance  and  such  sales  are 
usually  denoted  by  the  abbreviation  c.  i.  f.  (cost,  insurance,  and 
freight).  When  the  shipment  is  made  a  sight  draft  is  made  on  the 
purchaser,  expressed  in  the  currency  of  the  contract,  which  is  im- 
mediately solcl  to  some  bank  at  the  rate  of  exchange  prevailing  on  the 
particular  date. 

Section  2.  American  branches  of  foreign  houses. 

Comparatively  few  foreign  grain  merchants  have  branch  offices 
in  the  United  States.  Most  foreign  firms  when  buying  grain  in 
America  deal  with  Ajnerican  export  houses.  A  few  foi-eign  grain 
merchants  have  established  connections  with  American  firms,  which 
act  more  or  less  as  representatives  of  these  foreign  houses,  handling 
the  business  usually  on  a  commission  or  brokerage  basis. 

There  are  several  large  foreign  concerns  which  maintain  branch 
offices  in  the  United  States,  mainly  at  New  York  City.  They  also 
frequently  have  branches  in  the  chief  grain  exporting  and  importing 
countries.  Thus,  Samuel  Sanday  &  Co.,  of  London,  have  branch 
offices  at  Liverpool,  Hull,  Glasgow,  Antwerp,  Rotterdam,  and  Ham- 
burg; and  are  represented  by  Sanday  &  Co.  at  Buenos  Aires,  Rosario, 
Bombay,  and  New  York  City,  and  at  Karachi  by  Sandav,  Patrick 
&  Co. 

The  LTnited  States  branches  of  the  foreign  concerns  handle  a  large 
part  of  the  grain  exported  from  this  country.  This  is  particularly 
true  of  wheat.  In  1921  the  specified  LTnited  States  branches  of  for- 
eign houses  exported  the  quantities  of  wheat  indicated  in  the  follow- 
ing statement: 

Table  16.— Quantity  of  toheat  exported  from  the  United  States  by  American 
branclies  of  foreign  concerns  in  1921. 


Firm. 


Sandav  &  Co 

Louis  Dreyfus  &  Co 

Balfour,  Gutlirie  &  Co 

Schilthiiis  American  Trading  Co. 

Suzuki  &  Co 

Mitsui  &  Co.  (Ltd.) 

Mitsubishi  Shoji  Kaisha 

Total 


Bushels.i 


51,587,922 
36,  768,  .353 
5,941,200 
2,919,419 
2,175,000 
1,900,000 
1, 138, 614 


102, 430, 508 


1  Includes  exports  of  both  Canadian  and  United  States  wheat. 


These  seven  foreign  concerns  exported  about  30  per  cent  of  the 
total   wheat  exported   from   the  United   States  in   1921,  including 


METHODS   OF   FOREIGN   BUYERS.  31 

Canadian  wheat  moving  throuo-h  this  country.  The  aboA^e  table  may 
not  list  all  of  the  foreign  concerns  with  branches  in  this  country,  but 
it  does  include  all  of  the  important  ones.     (See  Chap.  V.) 

The  American  representatives  of  most  of  the  foreign  houses  with 
branches  in  the  United  States  were  interviewed  to  ascertain  their 
methods  of  operations.  The  information  thus  obtained  was  supple- 
mented by  information  from  the  files  of  these  companies  and  by  in- 
terviews with  representative  American  firms  in  direct  competition 
with  these  foreign  houses. 

In  practically  every  instance  the  United  States  branch  offices  of 
foreign  concerns  operate  almost  entirely  upon  instructions  from  their 
head  ofiices.  The  branches  have  little  to  do  with  the  actual  selling  of 
grain,  and  are  practically  only  buying  and  forwarding  agents.  Some 
times  a  branch  is  permitted  to  make  sales  in  the  United  States  or 
in  other  countries,  where  the  firm  is  not  represented,  without  express 
authority  of  the  head  office.  In  such  cases  any  profits  or  losses  would 
be  taken  by  the  branch  office.  Generally  speaking,  however,  a 
branch  in  this  country  acts  only  upon  orders  from  abroad  and  all 
profits  and  losses  are  taken  by  the  head  office.  In  some  cases  the 
branch  office  is  permitted  to  add  a  small  sum,  as  one-half  cent  per 
bushel,  to  all  transactions  handled  by  it,  to  cover  its  own  expenses. 
It  is  these  branch  offices  of  foreign  concerns  Avith  which  this  part 
of  the  report  is  chiefly  concerned. 

Section  3.  Operations  of  United  States  branches  of  foreign  concerns. 

Supervision  or  branch  orricES. — The  head  office  of  a  large 
foreign  grain  house  exercises,  as  a  rule,  strict  supervision  over  its 
various  branches.  By  means  of  cables  and  letters  the  branch  keeps 
the  head  olTice  advised  of  all  important  facts  concerning  its  activities, 
and  also  reports  general  trade  news  and  gossip.  The  head  office 
frequently  cables  information  a-s  to  market  conditions  abroad. 

Origin  or  orders. — Every  effort  is  made  by  the  head  office  to  keep 
in  close  contact  wdth  conditions  in  the  w^orld  grain  trade.  A  for- 
eign concern  having  branches  in  manj'^  countries  is  thoroughly  ad- 
vised concerning  world  grain  conditions.  Its  trades  thus  are  based 
upon  information  which  is  frequently  not  available  to  its  competi- 
tors who  do  not  have  branch  offices  in  many  countries.  It  is  partly 
because  of  the  fact  that  the  head  office  receives  such  widespread  data 
that  all  orders  emanate  from  there. 

Each  day  the  American  branch  office  cables  the  head  office  the 
grain  prices  at  the  close  of  the  American  markets.  At  times  these 
cables  merely  gi^^e  flat  prices,  as  for  example,  "  Gulf  No.  2  hard 
October  $1,115,  November  1.12i,  first  half  December  1.13-^,  second 
half  December  1.14,  etc."  Sometimes,  besides  such  information  as 
the  above,  the  branch  cables  prices  as  "  rye  down  cent ;  corn  up  f , 
barley  malting  feed  unchanged,  *  *  *,  discount  spot  8-^;  Oct. 
8f,  Dec.  8^."  The  first  of  the  above  illustrations  gives  prices  at 
which  No.  2  hard  red  winter  wheat  can  be  purchased  f.  o.  b.  steam- 
ers at  Gulf  points  for  shipment  within  the  months  or  periods  speci- 
fied. The  second  gives  the  fluctuations  in  prii  es  of  various  grains  on 
the  Winnipeg  grain  exchange  as  compared  with  the  prices  of  the 
preceding  day.  The  latter  part  of  the  second  message  refers  to  the 
discounts  at  which  contract  wheat  was  selling  under  the  current 


32  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

future  at  Winnipeg,  spot  wheat  selling  at  8|  cents  per  bushel  under 
the  Winnipeg  future. 

As  preA'iously  mentioned,  the  head  office  of  a  foreign  concern 
attends  to  all  sales  of  grain.  In  addition  to  the  cables,  as  given  above 
(and  similar  ones  are  received  from  all  the  firm's  branches  in  the 
grain  ex])orting  countries),  the  head  office  also  receives  bids  for 
grain  from  all  over  the  world.  By  means  of  this  information  it 
is  able  to  make  sales  to  the  best  advantage  and  to  supply  the  grain 
from  any  source  desired.  In  the  case  of  some  concerns,  probably 
the  majority,  the  branch  offices  in  exporting  countries  report  to  the 
head  office  all  information  they  gather  as  to  possible  sales  of  grain. 
The  head  office  then  endeavors  to  get  the  orders.  This  is  largely 
true  of  possible  sales  to  concerns  outside  the  United  States. 

Numerous  sales  are  made  by  the  United  States  branches,  usually 
with  the  approval  of  the  head  offices,  to  United  States  exporters  and 
to  the  local  branch  offices  of  other  foreign  concerns.  These  sales  con- 
stitute the  bulk  of  the  business  originated  by  the  branch  offices  in  this 
country.  Since,  as  will  later  appear,  the  foreign  houses  maintain 
stocks  of  grain  in  this  country,  they  are  frequently  in  a  position  to 
make  sales  to  other  concerns  in  the  United  States  who  have  orders 
for  grain  of  a  quality,  or  in  such  quantities,  they  themselves  do  not 
have  available.  Frequently,  in  instant  es  of  this  latter  character,  the 
foreign  houses  merely  lend  other  firms  sufficient  grain  to  fill  orders. 

Handling  orders  by  United  States  branch  offices. — Instructions 
from  the  head  office  of  a  foreign  concern  for  purchases  of  grain  by 
its  United  States  branches  arc  received  in  various  forms.  They 
may  be  in  the  nature  of  a  bid  or  they  may  be  an  acceptance  of  an 
order  transmitted  to  them  by  the  branch  office.  At  times  the  head 
o:^ce  may  cable  a  request  for  offers  as  "  Offer  earliest  1,000  tons  2 
hard  c.  i.  f.  Constantinople."  Upon  receipt  of  a  bid  the  branch  office 
first  determines  if  it  is  "  worka])le." '  If  the  price  mentioned  is  out 
of  line  with  prices  in  America  the  head  office  is  so  advised.  At  times 
it  is  difficult  to  fill  an  order  promptly  and  the  head  office  is  then 
cabled  about  as  follows :  "  Your  77  working,"  which  means  that  the 
order  of  the  head  office  as  contained  in  their  cable  No.  77  is  being 
worked  and  that  there  is  a  possibility  of  filling  it.  The  filling  of  an 
order  frequently  involves  the  exchange  of  counter  bids  and  offers. 

Most  purchases  of  grain  in  America  by  these  foreign  concerns  are 
at  prices  based  on  a  future,  usually  Chicago  or  Winnipeg.  Thebids  and 
offers  are  generally  stated  as  an  amoimt  over  or  under  the  future,  as, 
for  example,  "32  cents  OA^er  Chicago  May."  The  actual  per  bushel  price 
of  the  grain  is  determined  by  a  purchase  of  the  required  quantity  of 
the  futures.  If,  for  example,  a  foreign  concern  purchased  100,000 
bushels  of  wheat  at  32  cents  over  Chicago  May  and  the  100,000 
bushels  of  Chicago  May  were  purchased  at  $1.10  per  bushel  the  price 
to  be  paid  by  the  foreign  house  for  the  actual  grain  would  be  $1.42 
per  bushel.  By  thus  basing  their  transactions  on  a  future  it  is  hoped 
to  eliminate  the  risks  from  .market  fluctuations,  the  seller  believing 
his  profit  to  be  secure,  ordinarily,  since  it  is  included  in  the  amount 
over  the  future  designated  in  the  offer  or  bid,  whichever  was  ac- 
cepted. Other  factors,  however,  may  and  frequentl}^  do  affect  this 
margin.     Freight   rates   and  exchange  fluctuate,   and   while  every 


METHODS   OF   FOREIGlSr   BUYEES.  83 

effort  is  made  to  guard  against  losses  from  these  factors,  it  is  not 
always  possible  to  do  so.  Most  of  the  offers  to  sell  made  abroad  by 
the  foreign  concerns  are  provisional  in  that  they  are  subject  to 
acceptance  by  the  buyer  before  a  specified  time,  usually  noon  of  the 
day  following.    These  offers  to  sell  are  at  a  flat  price. 

After  the  grain  has  reached  the  country  elevators,  the  movement  is 
then  to  the  large  interior  terminal  markets,  as  Kansas  City,  Chicago, 
Minneapolis,  Duluth,  Superior,  or  to  the  large  seaport  markets,  as 
Galveston,  New  Orleans,  Portland  (Oreg.),  Baltimore,  Philadelphia, 
and  New  York,  where  it  is  sold  to  dealers.  The  grain  moving  to  the 
seaboard  markets  directly  from  country  elevators  is  usually  sold 
by  the  latter  to  the  large  foreign  houses  or  other  merchants  engaged  in 
the  export  business  or  to  concerns  which  are  merely  fobbers.  These 
latter  have  usually  sold  the  grain  on  an  f.  o.  b.  steamer  basis  to  ex- 
porters. 

The  proportion  shipped  directly  from  country  elevators  varies 
coMsiderably  for  different  exporters.  According  to  information 
furnished  by  the  Barnes-Ames  Co.,  approximately  50  per  cent  of 
their  shipments  to  the  Gulf  ports  passes  through  Kansas  City 
elevators,  where  it  is  cleaned  and  mixed,  while  the  remaining  50  per 
cent  is  shipped  directly  from  the  country  elevators  to  the  Gulf 
ports.    The  Armour  Grain  Co.  stated  that: 

For  sixty  to  ninety  clays  after  harvest  the  movement  is  mostly  direct  from 
the  country.  After  that  time  it  depends  largely  on  the  foreign  demand  and 
the  country  movement. 

The  J.  Rosenbaum  Grain  Co.  estimated  that  70  per  cent  of  their 
slii])ments  are  made  directly  from  the  country  to  the  Gulf  ports, 
while  Wallingford  Bros.,  of  Wichita,  Kans.,  shipped  96  per  cent  of 
their  1920  sales  for  export  directly  from  the  country  elevators  to  Gulf 
ports. 

Foreign  concerns  rarely,  if  ever,  bid  the  country  direct.  Occa- 
sionally they  have  sent  bids  to  brokers  located  at  small  interior 
points  where  a  particular  quality  of  grain  is  produced.  Most  of  the 
buying  by  the  local  branches  of  foreign  houses  is  done  on  the  floor 
of  the  New  York  Produce  Exchano-e  through  brokers.  These  brok- 
ers  are  m  constant  communication  with  dealers  at  interior  markets. 
They  also  are  aware  of  grain  Avhich  is  for  sale  by  other  brokers  on 
the  exchange.  The  representative  of  the  foreign  house  approaches 
one  or  more  brokers  and  offers  to  buy  grain  in  a  specified  "  position," 
i.  e.,  seaboard,  Buffalo,  etc.,  sometimes  at  a  definite  price.  At  other 
times  no  price  limit  is  given.  The  broker  may  be  able  to  fill  the 
order  immediately;  on  the  other  hand,  he  may  have  to  ware  some 
interior  dealer  and  await  reply.  As  soon  as  he  has  secured  ac- 
ceptance of  the  bid  he  reveals  the  names  of  his  principals  and  re- 
ceives a  fee  for  his  services. 

As  previously  stated,  these  purchases  are  generallj'^  at  a  price  based 
upon  a  future,  or  option,  as  it  is  frequently  called  in  the  trade.  It 
is  therefore  the  practice  to  make  a  futures  transaction  (a  purchase)  in 
order  to  determine  the  price  per  bushel.  On  sales  made  on  this  basis. 
i.  e.,  so  much  over  the  futures,  the  buyer  of  the  actual  grain  (in  this 
case  the  branch  of  the  foreign  house)  buys  a  quantity  of  the  futures 
equal  to  the  quantity  of  cash  grain  purchased.  This  futures  in  the 
settlement  for  the  purchase  is  turned  over  to  the  seller  of  the  actual 


34  METHODS   AND   OPERATIONS   OF   EXPORTEES. 


4 


grain  and  also  accomplishes  two  purposes :  (1)  It  fixes  the  per  bushel 
price;  (2)  it  closes  the  futures  account  of  the  seller.  Tlie  following 
quotation  from  a  letter  from  a  New  York  branch  of  a  foreign  firm, 
dated  November  16,  1920,  illustrates  this  practice: 

As  rotcards  option  business,  we  must  say  frankly  tliat  at  the  present  time 
our  business  is  practically  entirely  eonfinecl  to  purchases  of  options  to  f;ive  up 
against  cash  grain,  in  which  case  we  almost  always  buy  it  in  through  the  house 
that  has  it  sold  for  the  account  of  the  seller  of  the  cash. 

•  To  illustrate,  a  grain  dealer  may  have  100,000  bushels  of  purchased 
grain  in  store,  this  grain  is  hedged  by  a  sale  of  100,000  bushels  of 
some  futures.  "VVlien  the  owner  sells  the  actual  grain  at,  say,  $0.o0 
over  the  futures,  he  is  short  100,000  l)ushels  of  the  futures.  The  pur- 
chase of  100,000  bushels  of  the  futures  by  the  buyer  of  the  actual  grain 
and  the  transfer  of  this  purchase  of  futures  to  the  seller  of  the  actual 
grain  balances  the  latter's  transactions  in  futures.  It  should  be 
noted  that  transactions  based  on  a  futures  are  not  peculiar  to  those 
between  brokers  and  the  foreign  houses,  but  are  common  between 
all  types  of  grain  dealers  in  America,  Some  purchases  are  made  by 
foreign  concerns,  and  also  other  types  of  grain  dealers,  at  flat  prices, 
e.  g.,  $1.40  per  bushel.  In  such  transactions  it  is  not  necessary  to 
buy  in  an  equal  quantity  of  futures  for  the  account  of  the  seller. 

The  question  of  position  of  grain  is  frequently  a  determining 
factor  in  purchases  by  foreign  houses.  At  times  it  is  necessary  to 
buy  grain  which  may  be  shipped  immediately  in  order  to  fill  orders 
and  grain  in  a  "  near-by  position  "  is  tlien  imperative.  At  times  this 
will  force  premiums  for  such  grain  to  higher  levels.  Port  facilities 
must  also  be  taken  into  consideration.  In  the  middle  of  March.  1922, 
few  foreign  buyers,  or  American  exporters  for  that  matter,  would 
buy  grain  for  immediate  shipment  from  Gulf  ports  owing  to  the 
congested  conditions  which  there  obtained.  This  resulted  in  a  fall 
in  premiums  for  grain  moving  to  Gulf  ports. 

Hedging  and  futures  transactions. — The  foreign  buyer  may  or 
may  not  hedge  his  purchases  of  cash  grain  by  sales  of  futures,  de- 
pending upon  circumstances.  This  is  very  frequently  unnecessary 
because  the  purchases  were  made  to  fill  sales,  and  consequently  to  sell 
futures  would  only  result  in  the  foreign  concern  being  short  by  the 
quantity  of  futures  sold.  If  the  grain  was  bought  for  storing,  or 
to  ship  unsold,  it  might  or  might  not  be  hedged,  depending  upon  the 
judgment  of  the  foreign  company.  Most  of  the  representatives  of 
these  concerns  who  were  interviewed  stated  that  while  it  was  their 
general  policy  to  hedge,  they  frequently  w^ent  long  or  short,  both  in 
cash  grain  and  in  futures,  when  in  the  judgment  of  the  company 
it  was  profitable  to  do  so.  The  following  quotation  from  a  letter 
from  the  New  York  branch  office  of  a  European  firm  to  their  corre- 
spondent at  Winnipeg,  under  date  of  September  28,  1921,  is  inter- 
esting in  this  connection : 

*  *  *  We  are  already  short  a  million  and  a  half  bushels  and,  of  course, 
shall  be  short  a  great  deal  more  in  view  of  our  necessity  to  buy  in  the  very 
near  future  to  fill  freights.  This  makes  our  position  on  the  short  side,  par- 
ticularly In  view  of  the  falling  off  in  receipts,  very  serious,  and  we  are  blam- 
ing ourselves  very  much  for  not  having  insisted  on  going  on  switching  the 
otiier  day,  at  the  time  we  told  you  to  do  so  up  to  600,000  bushels  and  not  have 
acquiesced  in  your  holding  off  on  chance  of  October  weakening. 


METHODS   OF   FOREIGN"   BUYERS.  35 

With  the  bad  weather  and  the  interrupted  movement,  it  was  practically  a 
foregone  conclusion  that  the  strength,  if  any,  developed  in  the  movement,  was 
bound  to  be  in  October. 

"We  might  easily,  under  present  conditions,  get  short  as  high  as  two  and 
a  half  to  three  million  bushels  of  October  and  this  will  never  do.  Therefore, 
we  have  wired  you  definitely  to  go  on  switching  freely  in  order  to  eliminate 
a  good  part  of  our  October  interest  and  to  sell  November  instead  of  May,  as 
we  are  already  long  on  November  and  this  will  even  us  up  on  the  market. 

It  is  too  bad  that  we  lost  such  a  good  opportunity  the  other  day  but  it  cannot 
be  helped,  so  we  must  now  get  out  of  our  situation  as  best  we  can. 

At  times  sales  of  grain  for  delivery  at  some  future  date  are  made 
by  foreign  houses  and  covered  by  a  purchase  of  futures,  or  options, 
"with  the  intention  of  taking  delivery  on  these  futures  contracts. 
Sometimes  sales  of  grain  for  future  delivery  are  made  and  not  cov- 
ered immediately  by  purchases  of  options,  the  seller  believing  the 
market  will  decline  before  the  expiration  of  the  time  of  delivery, 
in  which  event  the  grain  can  be  bought  at  a  larger  profit.  At  other 
times  such  sales  are  partially  covered  at  time  of  sale,  the  balance 
being  bought  in  on  decline  in  the  price  of  the  future. 

Purchases  of  futures,  or  options,  are  made  without  having  orders 
to  fill,  the  company  feeling  that  the  grain  is  cheap  and  can  be  ulti- 
mately sold  at  a  profit.  Such  transactions  are  frequently  closed  out 
at  a  profit  before  the  expiration  of  the  option,  and  at  times  at  a  loss ; 
or  the  company  may  take  delivery  on  their  futures  contracts  and 
sell  the  actual  grain.  These  foreign  concerns  spread  between  mar- 
kets whenever  such  practice  is  believed  profitable.  The  following 
quotation  from  a  letter  from  a  New  York  branch  of  a  foreign  firm 
to  its  Winnipeg  correspondent,  dated  December  17,  1921,  is  illus- 
trative of  a  spreading  transaction : 

The  price  of  your  May/Winnipeg  Oats  compared  with  Chicago/May  seems 
to  hold  possibilities  of  profit  on  a  spread  and  we  today  had  Logan  &  Bryan 
request  you  to  spread  250,000  bushels  of  May/Winnipeg  Oats  into  Chicago/May 
at  6H  difference,  buying  the  Winnipeg  and  selling  the  Chicago.  We  should 
like  to  have  your  views  on  this  spread. 

Practically  all  futures  transactions  for  the  American  branch  of 
a  foreign  concern  are  undertaken  only  upon  orders  from  the  head 
office.  The  branch  office  is  frequently  consulted  as  to  the  wisdom 
of  purchases  and  sales  of  futures  and  in  a  few  instances  is  per- 
mitted to  deal  in  futures  to  a  limited  extent  on  its  own  account. 
Future  transactions  are  executed  in  the  markets  most  advantageous, 
Chicago  and  Winnipeg  being  the  markets  most  commonly  used  in 
North  America. 

The  foreign  houses  "  take  a  [)osition  "  on  the  market  much  more 
frequently  and  to  a  far  greater  extent  than  their  American  com- 
petitors. Speaking  generally,  any  position  taken  by  an  American 
firm  is  very  likely  to  be  hedged,  but  this  is  not  so  true  of  foreign 
houses,  the  latter,  in  the  view  of  some  of  the  trade,  being  more 
speculatively  inclined  than  the  American  firms.  Opinions  appear 
to  differ  as  to  whether  this  practice  of  the  foreign  companies  is  due 
to  a  willingness  to  "  take  a  chance  "  or  because  they  have  more 
accurate  information  as  to  market  conditions.  It  may  be  that  both 
factors  are  accountable,  especially  as  it  is  alleged  that  the  smaller 
foreign  concerns  do  not  hedge  as  frequently  as  the  American  firms. 

Terms  of  purchase. — Most  of  the  sales  to  American  branches  of 
foreign  houses  are  on  an  f.  o.  b.  steamer  basis,  although  this  is  a 

106205'— 22 5 


36  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

variable  matter  in  that  at  times  c,  i.  f.  sales  may  predominate.* 
In  f.  o.  b.  sales  the  seller  aj^rees  to  deliver  on  board  steamer  the 
kind  and  quantity  of  grain  sold  and  the  buyer  attends  to  steamer 
space  and  also  to  insurance.  When  the  steamer  is  loaded  the  official 
weight  and  inspection  certificates  are  obtained  by  the  American 
seller  and  presented,  with  invoice,  to  the  buyer,  who,  in  the  case 
of  the  local  branches  of  foreign  buyers,  draws  upon  the  head  office 
for  payment. 

Sales  made  on  a  c.  i.  f.  basis,  interpreted  strictly,  mean  that  the 
seller  should  deliver  the  grain  at  destination  before  receiving  pay- 
ment. In  actual  practice,  however,  payment  is  made  when  the  seller 
presents  the  bill  of  lading,  insurance  certificates,  inspection  and 
weight  certificates,  and  his  bill.  After  the  documents  have  been 
tendered,  even  if  the  ship  is  lost,  the  seller  has  no  further  interest 
in  the  transaction,  it  being  up  to  the  purchaser  to  collect  the  insur- 
ance, provided  the  seller  tendered  documents  before  he  was  aware  of 
the  disaster. 

If  the  foreign  concern  with  a  branch  office  in  New  York  City 
should  buy  grain  f .  o.  b.  Galveston,  or  any  other  port,  the  grain  is 
delivered  by  the  seller  in  accordance  with  the  orders  of  the  buyer's 
agent  at  port  of  delivery.  The  agent  must  see  that  the  steamer  gets 
her  place  at  the  elevator,  that  the  proper  grade  of  grain  is  delivered 
and  that  the  documents  are  in  order.-  For  his  services  the  agent 
receives  a  fee  of  about  one-eighth  cent  per  bushel. 

Steamer  space. — Most,  if  not  all,  of  the  large  foreign  concerns 
with  branches  in  this  country  charter  their  space  in  the  open  mar- 
ket. The  exporter,  and  the  United  States  branch  of  the  foreign 
house  may  be  considered  as  such  for  the  purposes  of  this  report,  gen- 
erally deals  with  freight  forwarders  who  have  offices  or  connections 
in  all  the  principal  ports.  The  United  States  branch  houses  fre- 
quently arrange  for  all  space  for  shipments  from  this  country.  The 
head  offices  at  times  secure  space  for  American  grain  when  bargains 
are  offered  or  in  a  time  of  scarcity  of  space  and  urgent  need  for  grain. 
Some  of  the  larger  foreign  houses  maintain  freight  departments 
which  attend  to  most  of  the  space  requirements  of  the  company. 
These  departments  may  be  callecl  freight  brokers,  since  they  function 
in  the  same  manner  and  the  brokerage  fees  are  saved  in  the  sense  that 
they  are  paid  to  a  department  of  the  firm.  The  following  quotation 
from  a  letter  dated  December  9,  1921,  from  the  head  office  of  a  for- 
eign concern  to  its  New  York  branch  is  interesting  in  connection  with 
freight  matters: 

Freights. — We  have  now  pretty  well  covered  our  short  freight  and  we  are 
glad  that  you  have  arranged  a  good  stream  for  this  month  to  our  various  ports. 
We  took  a  cheap  boat  yesterday,  the  "  TESEC,"  which  we  figure  we  will  use 
against  December  London  Manitoba  sales,  that  is,  she  works  out  at  about  3/3d. 
However,  we  may  not  use  her  to  London  when  it  comes  to  the  point  as  we  have 
several  options  on  her. 

You  have  offered  us  some  parcel  freight  to  Italy  and  other  places  for  January, 
February  and  March  but  we  have  decided  we  will  not  go  long  of  freight  so  far 
ahead ;  on  the  whole  we  do  not  think  there  can  be  any  advance  in  freights. 

>  Grain  bought  for  stocks  In  this  country  is  not  bought  on  a  c.  i.  f.  basis. 

'It  may  hapi)€n  that  part* of  the  grain  destined  for  a  particular  order  is  late  in  arriv- 
ing at  port,  and  in  such  instances  the  agent  may  be  able  to  borrow  grain  to  complete  the 
order. 


1 


METHODS   OF  FOREIGN   BUYERS.  37 

There  is  no  doubt  that  the  cost  of  running  steamers  is  coming  down  still  further, 
and,  therefore,  we  would  rather  be  short  than  long  of  freight  at  a  level  of  4/- 
carso  basis. 

Luke  freights.— L?ike  freights  for  the  Canadian  route  are  probably  different 
and  we  note  your  engagements  of  300,000  bushels  for  the  opening  of  navigation 
to  the  Bay  at  3  cents.  It  looks  very  reasonable  particularly  if  it  is  for  first- 
trip  boats  and  we  leave  it  to  your  discretion  to  take  more  at  the  same  price. 

The  chartering  of  space  is  conducted  in  a  manner  quite  similar  to 
the  purchase  of  grain,  the  exporter  bidding  a  freight  broker  for  a 
quantity  of  space  in  a  specified  position.  If,  as  sometimes  occurs, 
the  broker  can  himself  meet  the  requirements,  a  contract  is  made  for 
the  space  needed  and  the  steamship  company  notified.  AYhen  nego- 
tiating for  cargoes  it  is  generally  necessarj^  to  cable  London,  the 
headquarters  for  such  business,  and  this  is  also  conducted  through 
freight  forwarders,  who  in  turn  work  through  chartering  brokers. 
Usually  there  are  several  bids  and  offers  exchanged  before  the  deal 
is  consummated.  As  a  general  rule  parcel  freights  are  booked  here 
and  cargoes  in  London.  Usually  only  sufficient  space  to  meet  im- 
mediate requirements  is  chartered.  However,  at  times  the  more 
important  foreign  firms,  in  their  desire  to  be  absolutely  sure  of  suffi- 
cient space,  have  speculated  in  the  sense  that  they  have  booked  ocean 
freight  in  anticipation  of  their  needs. 

As  previously  indicated,  the  question  of  securing  space  is  fre- 
quentlj^  of  vital  importance.  Orders  are  often  lost  to  competitors 
because  the  latter  temporarily  have  all  the  available  space  to  certain 
ports  under  charter.  Then,  too,  ocean  freight  rates  frequently 
fluctuate  and  cause  losses,  although  profits  are  at  times  thereby 
increased. 

Exchange. — In  order  to  avoid  the  risk  of  fluctuations  in  exchange, 
a  sufficient  amount  of  foreign  money  ^  is  sold  to  cover  the  sale  of 
the  grain.  If  the  grain  is  sold  for  deliver}?'  in  the  future  the  sale 
of  exchange  must  be  made  for  delivery,  at  seller's  option,  in  the 
month  of  shipment.  Upon  making  shipment  and  securing  all  docu- 
ments the  latter  are  attached  to  the  draft,  which  is  presented  at  the 
bank  through  which  the  exchange  transaction  was  made.*  The 
matter  of  exchange  is  of  great  importance  to  grain  exporters. 
Dollars  at  a  high  level  frequently  force  foreign  buyers  out  of  the 
American  market.  Generally,  every  effort  is  made  to  prevent  fluc- 
tuations in  exchange  affecting  their  profits.  However,  these  foreign 
houses  frequently  speculate  in  exchange  and  at  times  have  been 
"  long  "  large  amounts  of  dollars  for  extended  periods  of  time. 

Stocks  or  grain. — Some  of  the  large  foreign  companies  endeavor 
to  maintain  a  regular  "  stream  "  of  grain  going  to  certain  ports. 
This  is  necessary  to  supply  their  regular  trade.  Every  effort  is 
made  to  prevent  disarrangement  of  this  flow  and  it  has  been  neces- 
sary at  times  to  divert  shipments  destined  for  other  ports  to  the 
stream  in  order  to  meet  imperative  requirements.  In  order  that 
the  stream  may  be  maintained  the  large  foreign  grain  finns  with 
branches  in  this  country  find  it  necessary  to  maintain   stocks  of 

*  That  in  which  payment  for  the  grain  is  to  be  made.  For  example,  at  the  present  time, 
March.  1922.  sales  to  TJnited  Kingdom  are  on  a  sterling  basis  ;  Portugal  also  generally 
buys  in  sterling;  Holland  in  guilders;  Greece  and  Italy  generally  in  dollars. 

■♦  This  applies  in  particular  to  American  exporters.  Since  the  local  branches  of  the 
foreign  houses  sell  but  little  of  the  grain  they  handle,  most  of  the  exchange  transactions 
are  attended  to  by  the  head  offices.  The  American  branches,  however,  frequently  attend 
to  transactions  involving  Canadian  exchange. 


38  METHODS   A'NT)   OPERATIONS   OF   EXPORTERS. 

f^rain  in  order  to  meet  their  demands  in  times  of  emergencies.  This 
is  particularly  true  when  foreign  countries  are  buying  from  hand  to 
moutli,  and  it  is  necessary  to  have  grain  in  "  near-by  positions  "  for 
prompt  shipments.^ 

These  stocks  of  grain  are  stored  in  public  elevators  at  points  be- 
lieved most  strategic  for  the  purpose  of  the  individual  concern. 
Few  foreign  concerns  own  elevators  in  North  America.  As  a  rule 
the  eastern  seaboard  markets  are  utilized  for  this  purpose,  although 
considerable  quantities  also  are  stored  at  Buffalo  and  other  interior 
markets  by  these  concerns.  Winter  storage  in  boats  at  Buffalo  is 
used  frequently  when  rates  and  general  market  conditions  are  be- 
lieved favorable  to  the  practice.  Storage  space  in  elevators  at  Gulf 
ports  is  also  used.  Occasionally  grain  has  been  stored  at  Pacific 
coast  ports.  Most  of  the  Pacific  coast  business  is  handled  by  the 
head  offices  of  the  foreign  concerns  which  deal  directly  with  firms 
on  the  Pacific  coast.  Stocks  are  also  maintained  abroad  by  some 
concerns  in  order  to  insure  a  supply  of  grain  at  all  times.'' 

These  stocks  of  grain  presumably  yield  an  additional  profit  in 
that  the  owners  are  able  at  times  to  mix  grain  of  a  low  grade  with 
that  of  a  higher  grade  and  sell  the  resultant  mixture  as  No.  2 
gi-ade.'^  The  following  quotation  from  a  letter  dated  February  1, 
1921,  to  the  head  office  of  a  foreign  firm  from  its  American  branch 
is  of  interest  in  this  connection : 

We  unfortunately  found  when  it  came  to  making  an  actual  shipment  of 
#1  Dark  Northern  that  we  had  to  make  the  mixture  35%  of  #1  and  65% 
of  #3  instead  of  25%  and  75%  respectively  as  originally  advised  you.  We 
could  also  probably  make  Dark  #1  Northern  out  of  half  and  half  mixture 
of  #2  Northern  and  #3  Northern. 

This  practice  of  mixing  is  very  common  and  from  all  reports 
profitable.  It  is  a  well-known  fact  that  grain  going  for  export  is 
generally  of  the  lowest  qualit}?^  permissible  for  the  designated  grade. 

Section  4.  Handling  grain  abroad. 

Facilities  for  handling. — While  comparatively  little  could  be 
learned  in  this  country  of  the  distribution  of  grain  abroad,  it  is 
reported  that  the  facilities  for  handling  grain  in  European  countries 
are  generally  antiquated  and  inefficient  as  compared  with  those  of 
the  United  States  and  Canada.  Comparatively  few  European  ports 
have  modern  equipment  for  unloading  grain  from  steamers.  In 
many  instances  the  grain  must  be  sacked  in  the  holds  of  steamers, 
transferred  to  lighters,  which  are  towed  to  docks  where  the  grain 
in  sacks  is  trucked  by  hand  into  warehouses  where  it  is  weighed 
and  stored. 

This  method  of  handling  is  not  only  inefficient  but  apt  to  be  w^aste- 
ful.  The  seller  of  the  grain  in  the  United  States  receives  upon 
loading  a  vessel,  certificates  showing  the  weight  of  the  grain  loaded. 

s  This  is  also  true  of  American  export  firms. 

»  While  it  was  stated  by  American  representatives  of  a  few  foreign  concerns  that  they 
maintained  stocks  abroad,  it  is  not  quite  clear  that  this  is  a  voluntary  situation.  It  is 
stated  that  these  concerns  only  maintain  stocks  when  they  have  arrivals  which  they 
can  not  dispose  of  advantageously  and  they  are  forced  to  store  it  for  a  turn  in  the 
market. 

^  This  practice  Is  not  confined  to  grain  in  store.  Grain  that  is  bought  for  immedmte 
shipment  is  frequently  mixed.  See  also  Federal  Trade  Commission's  report  on  The  Grain 
Trade,  Volume  III. 


METHODS   OF  FOREIGN   BUYEKS.  39 

These  certificates  are  sent  to  the  purchaser  as  evidence  of  the  seller's 
fulfillment  of  contract.  However,  in  order  to  insure  against  loss 
of  weight  before  actual  delivery  the  seller  may  insure  his  outturn, 
i.  e.,  the  unloading  weight,  with  one  of  the  several  insurance  com- 
panies engaged  in  this  business.  For  a  small  fee,  al)Out  one-eighth 
cent  per  bushel,  these  companies  insure  the  seller  against  loss  of 
outturn,  and  when  a  vessel  thus  insured  is  unloaded,  a  representa- 
tive of  the  insurance  company  checks  the  unloading  weights  and 
guards  the  interests  of  the  seller  in  the  unloading  process.  If  the 
quantity  of  grain  unloaded  is  less  than  that  called  for  by  the  weight 
certificates  the  insurance  company  stands  the  loss;  and  if  there  is 
an  excess  in  weight  the  insurance  company  receives  the  excess  grain 
in  addition  to  its  fee. 

Besides  the  unloading  process  mentioned  above  there  are  other 
steps  in  the  distribution  of  grain  in  foreign  countries  which  are  in- 
efficient and  slow  as  compared  with  American  methods.  Grain  re- 
ceived in  bulk  must  frequently  be  sacked  at  some  time  in  the  dis- 
tributing process,  owing  to  lack  of  bulk  handling  facilities  at  the 
point  of  consumption. 

Most  of  the  grain  shipped  from  the  United  States  by  foreign 
houses  is  sold  on  a  c.  i.  f.  basis  and  usually  in  large  quantities. 
Sometimes  sales  of  small  quantities  are  made  on  a  delivered  basis, 
the  grain  being  supplied  either  from  cargoes  or  stocks  maintained 
abroad. 

The  smaller  foreign  mills,  that  is,  those  unable  to  handle  a  full 
cargo  of  grain,  at  times  are  supplied  by  direct  shipment  from  Amer- 
ica. The  seller  frequently  is  able  to  secure  orders  from  three  or 
four  rather  small  mills  at  different  ports  in  somewhat  close  prox- 
imity, the  total  orders  being  sufficient  to  make  a  cargo,  A  steamer 
is  then  chartered  for  trips  to  all  these  ports.  This  is  more  ex- 
pensive, of  course,  than  a  charter  to  only  one  port,  but  is  some- 
times the  only  way  of  supplying  some  mills.  Other  small  mills 
secure  less  than  cargo  quantities  of  grain  by  shipments  on  regular 
steamers  to  their  port.  These  statements  also  apply  to  purchases 
by  small  local  grain  merchants.  There  are  many  markets  in  Europe 
capable  of  absorbing  but  little  grain  at  a  time  and  the  dealers  in 
these  places  must  of  necessity  buy  in  small  lots. 

Financing  foreign  buyers. — It  is  believed  that  some  of  these  large 
foreign  firms  obtain  much  of  their  business  because  they  are  willing 
to  finance  buyers.  American  firms  are  frequentlj^  unwilling  and  at 
times  unable  to  do  this.  Lack  of  credit  information  and  also  a  lack 
of  cooperation  from  American  banks  are  alleged  to  be  the  principal 
obstacles  to  financing  foreign  buj'ers  by  American  firms.  In  this 
connection  it  is  interesting  to  note  that  some  international  firms 
guard  their  financial  arrangements  very  zealously  to  prevent  any  in- 
formation concerning  them  becoming  public.  It  was  stated  that  the 
ability  to  finance  buyers  in  some  countries  was  one  of  the  most  im- 
portant, if  not  the  most  important,  factors  in  securing  orders.  For- 
eign buyers  have  frequently  paid  commissions  or  fees  to  sellers  of 
grain  not  only  on  the  grain  they  bought  but  for  financing  the  pur- 
chases. 

Combinations  among  foreign  buyers. — According  to  the  best  in- 
formation obtainable  there  are  comparatively  few  combinations  among 


40  METHODS   AND   OPERATIOISrS   OF   EXPORTERS. 

foreign  grain  buyers.  In  the  Netherluiids  and  Sweden  there  are  re- 
ported to  be  groups  of  millers  that  have  formed  organizations  which 
buy  grain  for  the  entire  group.  Since  the  M^ar  there  have  l)een  a  few 
consolidations  of  mills,  notably  in  France.  Accoi-ding  to  the  meager 
information  at  hand  these  have  had  little,  if  any,  effect  upon  compe- 
tition for  grain.  The  consensus  of  opinion  among  American  grain 
merchants  and  brokers  seemed  to  be  that  competition  in  the  foreign 
grain  trade  was  exceedingly  keen. 


Chapter  V. 
CONTROL  AND  INTERRELATIONS  OF  GRAIN  EXPORTERS. 

Section  1.  Form  of  organization  of  the  grain  exporting  company. 

Trading  in  grain,  including  the  sale  of  grain  to  the  foreign  buyer, 
does  not  require  extensive  physical  equipment  and  therefore  does  not 
call  for  any  considerable  capital  in  permanent  form.  While  some 
merchants  phj^sically  handle  and  store  the  grain,  thus  requiring  the 
use  of  considerable  capital,  others,  many  of  them  among  the  largest 
grain  merchants,  do  not  so  handle  the  grain.  Hence,  a  large  pro- 
portion of  the  capital  of  the  grain  merchant  may  consist  of  worldng 
capital  which  may  be  in  the  form  of  borrowings  secured  by  grain. 

Because  much  capital  in  a  permanent  form  is  not  required  in  grain 
merchandising,  the  corporate  form  of  organization  may  not  carry 
with  it  the  same  advantages  which  it  has  in  the  large  units  of  some 
other  lines  of  business.  Out  of  37  companies,  each  exporting  in  1921 
over  a  million  bushels  of  wheat,  1  was  an  individual  proprietorship ; 
9  were  partnerships ;  and  the  remainder  were  corporations.  Moreover, 
many  of  the  corporations  appear  to  be  only  nominally  capitalized; 
and  aside  from  small  holdings  by  the  salaried  traders  of  the  company 
and  the  directors'  qualifying  shares,  the  capital  stock  holdings  are 
usually  confined  to  a  comparatively  small  number  of  people. 

On  the  other  hand,  the  corporate  form  of  organization  for  a  given 
business  unit  facilitates  its  control  by  some  other  business  unit.  The 
company  directly  controlled  by  another,  sustaining  the  so-called  sub- 
sidiary relationship,  is  usually  incorporated,  though  the  controlling 
company  may  be  a  partnership  or  an  individual  proprietorship.  Nu- 
merous instances  of  such  company  control  over  an  incorporated  con- 
cern are  found  in  the  grain  exporting  business. 

The  corporate  form  of  organization  also  facilitates  the  affiliation  of 
companies.  A  partnership  firm  may  have  a  partner  in  common  with 
another  partnership  firm,  but  such  community  of  interest  is  not  so 
common  nor  so  practicable  in  the  partnership  as  in  the  corporation. 
Instances  are  noted  in  the  grain  exporting  business  where  companies 
are  linked  together  by  being  owned  wholly  or  in  part  by  common 
interests,  either  individual  or  company ;  other  instances  are  noted  of 
companies  being  linlvcd  together  by  holding  a  joint  control  over 
other  firms. 

Section  2.  Grain  exporting  companies  in  order  of  1921  volume  of  exported 
wheat. 

In  1921  there  were  36  companies  whose  exportation  of  wheat 
amounted  for  each  company,  including  its  fully  controlled  subsid- 
iaries, to  more  than  1,000,000  bushels.  Besides  these  3G  companies 
there  were  5  Baltimore  firms  ^  which  refused  to  furnish  the  commis- 

1  These  firms  are:  John  T.  Fahev  &  Co.,  a  partnership;  Baltimore  Grain  Co.,  a  corpora- 
tion; Gill  &  Fisher,  a  partnership;  H.  C.  Jones  &  Co.  (Inc.)  ;  and  Hammond.  Sn.vder  & 
Co.  (Inc.).  other  Baltimore  exporters  £ilso  refusing  information  are  C.  P.  Blackburn  & 
Co.,  and  Dennis  &  Co.  (Inc.). 

41 


42 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


sion's  requested  information,  whose  probable  wheat  exports  in  1921 
amounted  for  each  firm  to  more  than  1,000,000  bushels.  The  reported 
fifi^ures  for  these  36  companies  covered  not  only  American-raised 
wheat,  but  a  certain  portion  of  Canadian  wheat  which  could  not  be 
excluded  for  individual  companies  from  the  figures  representing 
their  total  exports.  As  reported  by  the  Department  of  Commerce, 
there  was  a  total  of  American  wheat  exported  in  1921  amounting 
to  279,948,601  bushels.  Adding  to  this  the  quantity  of  Canadian 
wheat  exported  from  American  ports  as  reported  by  the  Depart- 
ment of  Commerce,  viz,  65,016,919  bushels,  there  was  a  total  ex- 
port of  wheat  from  United  States  ports  in  1921  of  344,965,520  bushels. 
Of  this  total  the  36  companies  exported  293,885,920  bushels,  or  85.2 
per  cent. 

These  companies  are  listed  in  the  table  below  in  order  of  volume 
of  exported  wheat,  together  with  quantity  exported  by  each  firm 
and  percentage  of  total  exported  for  the  country,  and  accumulated 
quantities  and  percentages. 


Table  17. — Companies  whose  exportation  of  wheat  in  1921  amounted  for  each 
company,  with  suhsidiaries,  to  more  than  1,000,000  bushels,  icHth  quantities 
exported  and  percentages  of  total  exported. 


Company. 

Bushels. 

Per  cent 
of  total 
United 
States 
export.* 

Cumulative 
bushels. 

Cumu- 
lative 
percentage. 

51,587,922 
36,768,353 
19,084,914 

17,332,000 

13,96,5,974 
12,200,000 
11,001,578 
9,612,975 
8,369,229 
8,215,365 

8, 137, 100 
8,000,000 
7,938,897 
7,655,859 
7,348,170 
6,000,000 
5,941,200 
5, 443, 287 
5, 213, 950 
4,975,841 
4,614,874 
4, 300, 000 
3,973,357 
3,940,150 
3,616,027 
2,919,419 
2,175,000 
1,900,000 
1,807,650 
1, 804, 145 

1,584,740 
1, 505, 000 
1,393,300 
1,324,000 
1,138,614 
1,096,000 

1.5.0 
10.7 
5.5 

5.0 

4.0 
3.5 
3.2 
2.8 
2.4 
2.4 

2.4 
2.3 
2.3 
2.2 
2.1 
1.7 
1.7 
L6 
1.5 
1.4 
1.3 
1.2 
1.2 
Ll 
LO 
.8 
.6 
.6 
.5 
.5 

.5 
.4 
.4 
.4 
.3 
.3 

51,587,922 
88,356,275 
107, 441, 219 

124,773,219 

138, 739, 193 
150,939,193 
161,940,771 
171,553,746 
179,922,975 
188,138,340 

195,275,440 
204, 275, 440 
212,214,337 
219,870,193 
227, 218, 366 
233,218,366 
239, 159, 566 
244,602,853 
249, 816, 803 
254,792,644 
259, 407, 518 
263,707,518 
267,680,875 
271,621,025 
275,237,052 
278, 156, 471 
280,331,471 
282,231,471 
284, 039, 121 
285,843,266 

287,428,006 
288,934,006 
290,327,306 
291,651,303 
292,789,920 
293, 885, 920 

15.0 

25.6 

P  N  Gray  &  Co.  (Inc.),  New  York 

3L1 

Barnes-Ames  Co.,  Duluth,  and  New  York  subsid- 

36.2 

J.  Rosenbaum  Grain  Co.,  Chicago,  and  its  subsid- 
iary, Chesapeake  Export  Co.  (Inc.),  New  York... 
Kerr  Giiiord  &  Co  (Inc.)  Portland,  Oreg 

40.2 
43.8 

C   f!  &  G.  W.  Eddy  (Inc.),  Boston 

46.9 

Grain  Growers  Export  Co.  (Inc.),  New  York 

49.7 
52  2 

Wm  H  MtiUer  &  Co  (Inc.),  New  York 

54.5 

Norris  Grain  Co.,  Chicago,  Kansas  City,  and  New 
York.           

56.9 

E.  A.  Strauss  &  Co.  (Inc.),  New  York 

59.2 

C  B   Fox  Co  (Inc  )   New  Orleans 

61.5 

Albert  C.  Field  (Inc.),  New  York 

63.7 

65.9 

Nor  thern  Grain  &  Warehouse  Co.  Portland,  Oreg. . 

Balfour,  Guthrie  &  Co.,  San  Francisco,  Calif 

Hall-Baker  Grain  Co.,  Kansas  City  and  New  York. . 
Pacific  Grain  Co.,  Portland,  Oreg     

67.6 
69.3 
70.9 
72.4 

73.9 

75.2 

Webb  &  Kenward  (Inc.),  New  York 

76.4 

77.6 

Donahue-Stratton  Co.,  Milwaukee 

78.7 

Commercial  Union  of  America  (Inc.),  New  York. . 

Schilthuis  American  Trading  Co.,  New  York 

Suzuki  &  Co    Portland  Oreg  

79.8 
80.6 
81.3 

Mitsui  &  Co.  (Ltd.),  Portland,  Oreg 

81.8 

Blake-Dobbs  Co.  (Inc.),  New  York 

82.3 

Gray-Rosenbaum  Grain  Co.  (Inc.),  Portland,  Oreg. 
Langenberg  Bros.  Grain  Co.,  St.  Louis  and  New 

82.9 
83.3 

Peoples  Industrial  Trading  Corporation,  New  York. 
The  Updike  Grain  Co.,  Omaha,  Nebr 

83.8 
84.2 

84.5 

Mitsubishi  Shoji  Kaisha  (Ltd.),  Seattle,  Wash 

Cooperative  Wholesale  Society  (Ltd.),  New  York.. 

84.9 
85.2 

•  Total  wheat  exported  from  the  United  States,  1921,  including  Caoadiaa  wheat,  344,955,520  bushels. 


CONTROL  AND   INTERRELATIONS.  43 

It  appears  from  this  table  that  2  firms  (branches  of  foreign 
houses)  exported,  in  1921.  25.6  per  cent  of  the  total  wheat  exported 
from  the  United  States ;  that  4  firms  exported  36  per  cent ;  that  8  firms 
exported  50  per  cent ;  that  21  firms  exported  75  per  cent ;  and  that  36 
firms  exported  85  per  cent.  This  statement,  however,  does  not  dis- 
close the  full  extent  of  concentration  in  the  exportation  of  wheat.  As 
pointed  out  above,  5  Baltimore  firms  are  not  represented  in  these 
figures.  The  inclusion  of  the  exports  of  these  firms  would  doubtless 
raise  the  total  well  above  90  per  cent,  and  since  the  exports  of  one  of 
these  firms  are  particularly  large,  would  show  a  much  higher  total 
percentage  for  the  largest  half  dozen  companies.  The  remaining 
percentage,  less  than  10  per  cent,  perhaps  as  small  as  5  per  cent,  was 
exported  by  some  50  companies,  each  exporting  less  than  1,000,000 
bushels. 

Section  3.  Control  and  interrelations  of  the  principal  grain-exporting  firms. 

Attempt  is  here  made  to  set  forth  (1)  the  individual  and  company 
interests  controlling  the  principal  grain-exporting  companies;  (2) 
the  exporting  and  other  grain  and  elevator  companies  which  these 
principal  exporting  companies  themselves  control;  and  (3)  the  inter- 
relations of  these  exporting  companies  both  as  between  themselves 
and  as  between  themselves  and  other  grain  companies,  whether  the 
interrelationship  of  these  companies  is  through  their  being  owned 
by  a  single  interest  or  whether  it  is  through  their  jointly  owning 
other  firms,  in  either  case  the  companies  being  bound  together  hj  a 
common  interest.  Companies  are  treated  in  order  of  size  of  volume 
of  the  1921  wheat  exports,  except  that  related  companies  are  placed, 
as  far  as  possible,  in  juxtaposition  with  one  another. 

Samuel  Sanday  &  Co. — Samuel  Sanday  &  Co.,  London,  England, 
is  an  English  partnership,  its  principal  office  being  located  in  London. 
It  has  an  American  branch,  operating  as  Sanday  &  Co.,  with  an 
office  at  Xew  York,  which  purchases  all  grains  for  export  for  the 
account  of  the  main  office  in  London.  In  addition  to  the  51,600,000 
bushels  of  wheat  exported  in  1921,  it  exported  22,000.000  bushels 
of  corn,  rye,  oats,  and  barley.  Partners,  all  of  London,  are 
as  follows:  Samuel  Sanday,  H.  W.  Patrick,  A.  B.  Earle,  G.  T.  San- 
dav,  A.  C.  Sanday,  W.  D.  Sanday,  Robert  Clark,  G.  L.  Wilson, 
J.  Kenyon,  G.  M.  Clayton,  and  H.  Beatty.  The  firm  liolds  a  member- 
ship in  the  New  York  Produce  Exchange  in  the  name  of  G.  F.  Earle, 
their  New  York  manager,  who  was  a  vice  president  and  director  of 
the  Wheat  Export  Co.  (Inc.),  and  held  20  per  cent  of  its  stock.  This 
company  was  the  official  agent  for  the  allied  Governments  during  the 
war,  becoming  inactive  early  in  1920.     (See  below.) 

Louis  Dreyfus  &  Co. — Louis  Dreyfus  &  Co.,  Paris,  France,  a 
partnership,  has  branch  offices  in  New  York ;  London,  England ; 
Buenos  Aires,  Argentina;  Antwerp,  Belgium;  Bombay  and  Calcutta, 
India;  Melbourne,  Australia;  and  Barcelona,  Spain.  It  is  an  ex- 
porter and  importer  of  grain,  linseed,  and  cotton  seed.  In  1921 
it  exported  from  the  United  States  36,768,000  bushels  of  wheat, 
1,161,000  bushels  of  com,  841,000  bushels  of  rye,  and  1,352,000  bushels 
of  oats.  The  partners  are  Louis  Louis-Dreyfus  and  Charles  Louis- 
Dreyfus,  both  of  4  Rue  de  la  Banque,  Pans.  It  was  organized  in 
Paris  in  1915. 


44  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

r.  N.  Gray  &  Co.  (Inc.).— P.  N.  Gray  &  Co.  (Inc.),  New  York, 
is  a  grain  exporting  and  general  merchandising  firm  acting  also  as 
a  purchasing  agent.  In  1921  it  exported  19,085,000  bushels  of  wheat, 
5,042,000  bushels  of  corn,  5,304,000  bushels  of  rye,  1,015,000  bushels 
of  oats,  and  20,000  bushels  of  barley.  It  was  organized  in  1919  under 
the  laws  of  Delaware.  It  has  a  capital  stock  consisting  of  20,000 
shares  of  common  of  no  par  value,  and  5,000  shares  of  preferred  of 
$100  par  value.  The  preferred  has  no  voting  privilege.  Of  the  com- 
mon stock,  8,000  shares  are  owned  by  the  Societe  Anonyme  Bunge, 
Antwerp,  Belgium;  7,810  shares  by  Prentiss  N.  Gray,  New  York; 
and  the  remainder  bv  six  other  holders  in  New  York  as  follows: 
Carlos  Falk,  1,050;  Wallace  H.  Foster,  1,050;  John  D.  Fletcher, 
1,050 ;  Edgar  Eickard,  500 ;  Abbie  Church  Rickard.  400 ;  Edwin  P. 
Shattuck,  400.  The  entire  issue  of  common  stock  is  held  by  a  voting 
trust  expiring  February  15,  1926,  which  vests  the  unrestricted  voting 
privilege  in  the  hands  of  Edouard  Bunge,  care  of  the  Societe 
Anonyme  Bunge,  Antwerp;  Willy  Friling,  care  Bunge  &  Co. 
(Ltd.),  London;  Prentiss  N.  Gray,  New  York;  and  Wallace  H. 
Foster,  New  York.  The  preferred  stock  is  held  principally  by 
interests  represented  by  the  owners  of  the  common  stock,  1,500  shares 
being  held  by  Bunge  &  Born  (Ltd.),  Buenos  Aires,  Argentina,  a 
large  Argentine  grain  exporting  firm  owning  a  controlling  interest 
in  the  S.  A.  de  Molinos  Harineros  y  Elevadores  de  Granos,  a  large 
milling  firm  at  Buenos  Aires. 

P.  N.  Gray  &  Co.  (Inc.),  New  York,  holds  7,000  of  the  10,000 
shares  of  the  P.  N.  Gray  &  Co.  (Ltd.),  Winnipeg,  a  grain  merchan- 
dising firm.  It  also  holds  1,250  of  the  2,500  shares  ($100  par  value) 
of  the  Gray-Rosenbaum  Grain  Co.  (Inc.),  Seattle,  Wash.  (See  be- 
low.) The  Gray-Bunge  interests  operating  through  the  Gray-Rosen- 
baum Grain  Co.  (Inc.)  are  reported  as  negotiating  for  the  purchase 
of  the  Portland  Flouring  Mills  Co.  and  the  Pacific  Coast  Elevator 
Co.,  Portland,  Oreg.     (See  below.) 

Gray-Rosenbaum  Grain  Co.  (Inc.). — Gray-Rosenbaum  Grain  Co. 
(Inc.) ,  Seattle,  Wash.,  has  branches  at  New  York  and  Portland,  Oreg. 
It  is  an  exporter  of  and  a  dealer  in  grain.  In  1921  it  exported  1,804,000 
bushels  of  wheat.  It  is  capitalized  at  $250,000.  Of  the  2,500  shares 
of  stock,  P.  N.  Gray  &  Co.  (Inc.),  New  York,  holds  1,246  and  P.  N. 
Gray,  New  York,  holds  4;  while  the  J.  Rosenbaum  Grain  Co., 
Chicago,  holds  1,244,  and  E.  F.  and  E.  S.  Rosenbaum,  Chicago,  each 
holds  3  shares.  Its  president  is  P.  N.  Gray,  president  of  the  P.  N. 
Gray  &  Co.  (Inc.)  ;  its  vice  president,  E.  S.  Rosenbaum,  and  its  treas- 
urer, E.  F.  Rosenbaum,  both  of  the  J.  Rosenbaum  Grain  Co.  These 
three  officers  are  also  on  the  board  of  directors.  The  company  was 
formed  in  1921  under  the  laws  of  Delaware.  It  operates  on  the 
Pacific  coast. 

The  J.  Rosenbaum  Grain  Co. — The  J.  Rosenbaum  Grain  Co., 
Chicago,  111.,  operates  branch  offices  under  the  firm  name  at 
New  York,  Omaha,  Galveston,  and  Fort  Worth,  and  under  the 
name  of  the  Terminal  Elevators  at  Kansas  City.  It  was  organized 
under  the  laws  of  Illinois  in  1901.  It  declared  the  value  of  nearly 
47,000,000  bushels  of  export  wheat  in  1921,  and  it  therefore  handles 
much  more  export  grain  than  its  actual  export,  which  amounted  in 
that  year  to  13,520,000  bushels.    There  are  14  holders  of  stock,  but 


CONTROL  AND  INTERRELATIONS.  45 

the  greater  part  of  the  stock  is  held  by  immediate  members  of  the 
Kosenbaum  family  and  the  J.  Rosenbaiim  estate.  E.  F.  Kosenbaum, 
president  of  the  company,  and  E.  S.  Rosenbaum,  vice  president,  are 
both  large  stockholders. 

The  J.  Eosenbaiim  Grain  Co.  holds  a  one-half  interest  (the 
P.  N.  Gray  &  Co..  New  York,  holding  a  one-half  interest)  in  the 
Gra3^-Ilosenbaii'fn  Grain  Co.  (Inc.),  Seattle.  (See  above.)  It  also 
controls  the  Chesapeake  Export  Co.  (Inc.),  New  York.  (See  below.) 
Through  lease  from  the  Southern  Pacific  Terminal  Co.,  Houston, 
Tex.,  it  operates  the  Sunset  Elevator,  Galveston,  Tex. 

The  Chesapeake  Export  Co.  (Inc.). — The  Chesapeake  Export 
Co.  (Inc.),  New  York,  has  a  branch  office  at  Winnipeg,  Canada.  It 
is  a  grain  exporting  firm  having  exported  in  1921,  44G,000  bushels 
of  wheat  and  43,000  bushels  of  corn.  It  is  capitalized  at  $25,000  of 
common  stock,  all  owned  by  the  J.  Rosenbaum  Grain  Co.,  Chicago, 
and  $475,000  preferred  stock,  one-half  of  which  is  owned  by  E.  F. 
Rosenbaum  and  one-half  by  E.  S.  Rosenbaum,  both  of  the  J.  Rosen- 
baum Grain  Co.  Common  and  preferred  stock  have  like  voting 
powers.  The  company  was  organized  in  1915  under  the  laws  of 
Virginia. 

The  PeopIvEs  Industrial  Trading  Corporation. — The  Peoples 
Industrial  Trading  Corporation,  New  York,  is  an  exporting  and  im- 
porting firm.  It  is  reported  as  inactive  since  June  30,  1921.  During 
the  fiscal  j^ear  ending  that  date  it  exported  under  10  contracts 
1,506,000  bushels  of  wheat,  of  which  963,000  bushels  were  furnished 
by  the  J.  Rosenbaum  Grain  Co.,  Chicago,  111.  (see  above),  and 
543,000  by  the  Chesapeake  Export  Co.,  New  York,  subsidiary  of  the 
J.  Rosenbaum  Grain  Co.  The  Peoples  Industrial  Trading  Cor- 
poration is  capitalized  at  $500,000,  one-sixth  of  which  is  held  by  E.  F. 
Rosenbaum,  president  of  both  the  Peoples  Industrial  Trading  Cor- 
poration and  the  J.  Rosenbaum  Grain  Co. ;  one-sixth  by  the  Armour 
Grain  Co.,  Chicago  (see  below)  ;  one-twelfth  by  Percy  Rockefeller, 
New  York,  director  of  National  City  Bank.  New  York;  one-twelfth 
by  Samuel  IMcRoberts,  New  York,  formerh^  executive  manager,  Na- 
tional City  Bank,  and  formerly  director  of  Armour  &  Co.,  Chicago; 
and  one-half  by  Ivan  Stakheef  &  Co.,  Russia.  E.  F.  Rosenbaum, 
Chicago,  111. ;  George  E.  Marcy,  Chicago,  111.,  president  of  the  Armour 
Grain  Co. ;  Samuel  McRoberts,  New  York ;  and  Ernest  Eklund, 
New  York;  comprise  the  board  of  directors.  This  company  was 
organized  July  1,  1919,  under  the  laws  of  Delaware. 

Armour  Grain  Co. — Armour  Grain  Co.,  Chicago,  111.,  is  a  manu- 
facturer of  cereal  foods  and  a  grain  dealer  for  domestic  and  export 
use.  In  1921  it  exported  3,973,000  bushels  of  wheat.  It  is,  however, 
a  much  larger  fobber  of  export  grain  than  exporter.  It  declared 
value  on  export  wheat  at  the  United  States  customhouse  in  1921  for 
20,750,000  bushels,  which  of  course  includes  much  of  what  it  reports 
above  as  itself  exporting.  Its  exports  of  corn  for  the  year  were 
12.951,000  bushels.  It  is  capitalized  at  $1,000,000,  53  per  cent  of 
which  is  owned  by  J.  O.  Armour,  Chicago,  111.,  president  of  Armour 
&  Co. ;  8  per  cent  by  P.  D.  Armour,  Lake  Forest,  111. :  8  per  cent 
by  Lester  Armour,  Chicago,  111. ;  5^  per  cent  by  ]\f re.  Lolita  Armour, 
Lake  Forest,  111. ;  124  per  cent  by  G.  E.  Marcy,  Chicago,  111.,  president 
of  Armour  Grain  Co. ;  8  per  cent  by  May  L.  Valentine,  New  York ; 


46  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

and  various  small  holdin^js  by  directors.  This  company  owns  the 
stock  in  the  Export  Elevator  Co.,  Biifi'alo,  N.  Y.,  which  is  capitalized 
at  $25,000,  and  has  branch  elevators  at  Fairport,  Ohio,  and  Texas 
City,  Tex,  The  Armour  Canadian  Grain  Co.  (Ltd.),  Winnipeg, 
Canada,  capitalized  at  $40,000,  is  owned  by  this  firm.  The  Armour 
Grain  Co.  holds  the  entire  stock  ($50,000)  of  the  Erie  Co.,  New 
York,  an  elevator  concern,  and  the  entire  stock  ($1,000)  of  the  Buf- 
falo Cereal  Co.,  Buffalo,  N.  Y.,  a  cereal  manufacturing  concern. 
One-sixth  of  the  capital  stock  (total  stock  $500,000)  of  the  Peoples 
Industrial  Trading  Corporation  (see  above)  is  held  by  the  Armour 
Grain  Co.,  while  one-twelfth  is  held  by  Samuel  McRoberts,  former 
director  of  Armour  &  Co.  The  Armour  Grain  Co.  was  organized 
in  1901  under  the  laws  of  New  Jersey. 

The  Barnes-Ames  Co.  subsidiaries  and  affiliated  companies. — 
The  Barnes- Ames  firms  engaged  in  exporting  grain  or  fobbing  export 
grain  are  as  follows:  Barnes- Ames  Co.,  Duluth,  Minn.,  Barnes-Irwin 
Co.  (Inc.),  Philadelphia,  Pa.,  Barnes-Jackson  Co.  (Inc.),  Baltimore, 
Md.,  and  Barnes-Piazzek  Co.  (Inc.),  Kansas  City,  Mo.^  While  ac- 
tually exporting  about  17,300,000  bushels  of  wheat  in  1921,  this 
group  of  companies  handled  much  other  export  wheat,  having  de- 
clared a  value  on  over  25,000,000  bushels  in  that  year.  Other  Barnes- 
Ames  firms  are:  The  Itasca  Elevator  Co.,  Duluth,  Minn.;  the  Neal 
Grain  Co.,  Omaha,  Nebr. ;  and  Smyth,  Barnes  &  Co.  (Ltd.),  London, 
England. 

The  Barnes-Ames  Co. — The  Barnes-Ames  Co.,  Duluth,  the  pri- 
mary company  in  the  Barnes  group,  capitalized  at  $1,000,000,  is 
owned  principally  by  Julius  H.  Barnes  and  Ward  Ames,  jr.,  whose 
holdings,  equal  in  amount,  comprise  more  than  90  per  cent  of  the 
total  capital  stock.  It  was  organized  in  1914  under  the  laws  of 
Minnesota.     It  has  a  branch  office  at  New  York, 

The  Barnes-Irwin  Co.  (Inc.). — The  Barnes-Irwin  Co.  (Inc.),  Phila- 
delphia, capitalized  at  $150,000,  is  owned  by  the  Barnes-Ames  Co., 
holding  51  per  cent  of  the  stock,  and  H.  D.  Irwin,  Philadelphia.  The 
composition  of  its  directorate  and  officiary  makes  clear  that  it  is  man- 
aged in  consonance  with  the  general  management  of  the  Barnes 
group  of  firms.  Julius  H.  Barnes  is  president,  H.  D.  Irwin,  first 
vice  president,  and  George  S.  Jackson,  Baltimore,  second  vice  presi- 
dent. The  company  was  organized  in  1920  under  the  laws  of 
Delaware. 

The  Barnes-Jackson  Co.  (Inc.). — The  Barnes- Jackson  Co.  (Inc.), 
Baltimore,  Md.,  is  also  controlled  by  the  Barnes- Ames  Co.  through  a 
majority  stock  ownership.  It  is  capitalized  at  $150,000,  49  per  cent  of 
its  stock  being  owned  by  George  S.  Jackson,  Baltimore.  Its  president 
is  Julius  H.  Barnes,  and  its  first  and  second  vice  presidents  are, 
respectively,  George  S.  Jackson  and  II,  D.  Irwin.  It  was  organized 
in  1920  under  the  laws  of  Delaware. 

The  Barnes-Piazseh  Co.  {Inc.). — The  Barnes-Piazzek  Co.  (Inc.), 
Kansas  City,  which  was  bought  out  and  ceased  doing  business  Febru- 
ary 28,  1922,  operated  as  gi-ain  receivers  and  shippers  of  domestic 
gi-ain  and  as  fobbers  at  Gulf  ports.  It  was  owned  by  the  Barnes- Ames 
Co,  in  the  amount  of  51  per  cent  of  stock,    D.  F,  Piazzek  held  30  per 

'  This  company's  business  and  assets  were  recently  sold  to  the  Nye-Schneider-JenJss  Co., 
of  Chicago,  and  it  ceased  doing  business  Feb.  28,  1922. 


CONTROL  AND   INTERRELATIONS.  47 

cent  and  the  remainder  was  held  by  P.  P.  Allen  and  O.  T.  Cook. 
Julms  H.  Barnes  was  its  president,  and  D.  F.  Piazzek,  vice  president. 
The  company  was  organized  under  the  laws  of  Delaware  in  1920.  It 
operated  a  branch  office  at  St.  Joseph,  Mo. 

The  Itasca  Elevator  Co. — The  Itasca  Elevator  Co.,  Dulnth,  op- 
erates a  grain  elevator.  It  is  capitalized  at  $100,000  and  is  owned 
by  the  Barnes-Ames  Co.  in  the  amount  of  77  per  cent  of  the  capital 
stock. 

The  Neal  Grain  Co. — The  Neal  Grain  Co.,  Omaha,  is  a  grain 
merchandising  firm  with  a  capital  stock  of  $25,000,  20  per  cent  of 
which  is  owned  by  the  Barnes-Ames  Co. 

Smyth^  Barnes  &  Co.  {Ltd.). — Smyth,  Barnes  &  Co.  (Ltd.),  Lon- 
don, has  a  capitalization  of  £50,000,  45  per  cent  of  which  is  held 
by  the  Barnes-Ames  Co.     It  buys  and  sells  grain. 

The  Zenith  Grain  Co.  (Ltd.).— The  Zenith  Grain  Co.  (Ltd.),  Win- 
nipeg, Canada,  is  a  correspondent  of  the  Barnes- Ames  Co. 

The  Nye  &  Jenks  Grain  Co. — The  Nye  &  Jenks  Grain  Co.  is  an 
important  grain  exporting  firm.  This  company  and  the  following 
domestic  grain  comj^anies  are  subsidiaries  of  the  Nye-Schneider- 
Fowler  Co.,  of  Fremont,  Nebr.,  which  is  controlled  under  a  five-year 
purchase  option  on  55  per  cent  of  the  stock  with  full  voting  power 
pending  exercise  of  the  option  by  Julius  H.  Barnes,  president  and 
large  stockholder  of  the  Barnes- Ames  Co.,  Duluth,  Minn,;  Trans- 
Atlantic  Brokerage  &  Export  Co.  (Inc.),  New  York;  Rialto  Elevator 
Co.,  Milwaukee,  Wis. ;  Independent  Grain  &  Lumber  Co.,  Mason  City, 
Iowa;  Nye-Schneider-Fowler  Grain  Co.,  0«maha,  Nebr.;  Central 
Granaries  Co.,  Lincoln,  Nebr.;  Nebraska  Elevator  Co., Lincoln, Nebr. ; 
Thresher  Fuller  Grain  Co.,  Kansas  City,  Mo. ;  Nye,  Jenks  &  Co., 
Minneapolis,  Minn.;  Nye-Schneider-Jenks  Co.,  Omaha,  Nebr. 

The  Nye  &  Jenks  Grain  Co.  {Chicago). — The  Nye  &  -^^^nks  Grain 
Co., Chicago, 111.,  having  a  branch  office  at  New  York, deals  in  both  do- 
mestic and  export  grain.  In  1921  it  exported  760,000  bushels  of  wheat. 
For  the  fiscal  year  ended  June  30,  1921,  however,  its  wheat  export 
amounted  to  2,920,000  bushels  and  its  corn  export  to  1,952,000  bushels. 
It  is  capitalized  at  $250,000,  all  held  by  the  Nye-Schneider-Fowler 
Co.,  Fremont,  Nebr.,  except  seven  shares  held  by  the  directors  to 
qualify  them  tor  the  office.  These  directors  are  F.  L.  Carey,  Chi- 
cago, 111.,  who  is  also  president  of  the  company;  L.  N.  Perrin,  Chi- 
cago, 111.,  vice  president;  A.  O.  Mason,  Chicago,  111.,  secretary; 
Julius  H.  Barnes,  New  York,  president,  Barnes-Ames  Co.,  Duluth, 
Minn.;  W.  I.  Beam,  Chicago,  111.,  treasurer;  Ealph  Van  Vechten, 
Chicago,  111.;  Charles  R.  Bostwick,  Fremont,  Nebr.  The  company 
is  organized  under  the  laws  of  Illinois. 

Hansen  Produce  Co.  (Inc.). — Hansen  Produce  Co.  (Inc.),  New 
York,  is  an  exporter  and  dealer  of  grain  and  feeding  stuffs.  In 
1921  it  exported  4,976.000  bushels  of  wheat.  Its  total  export  of 
other  grains  for  fiscal  year  ended  June  30,  1921,  was  larger  than  that 
of  any  other  firm,  corn  amounting  to  14,885,000  bushels,  rye  to 
11,617,000  bushels,  oats  to  1,877,000  bushels,  and  barley  to  495,000 
bushels.  It  is  capitalized  at  J??  1 ,250,000.  Of  the  12,500  shares.  Axel 
Hansen,  Kew  Gardens,  Long  Island  ,N.  Y.,  president  and  treasurer, 
owns  2,475  shares  and  Ericlcpon  &  Christensen,  Esbjerg,  Denmark, 
9,925  shares.    The  company  owns  the  entire  capital  stock  ($100,000) 


48  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

of  the  Universal  Commission  Co.,  Winnipeg?,  a  branch  house,  and  the 
entire  capital  stock  ($15,000)  of  the  W.  B,  Wheeler  Corporation, 
New  York. 

Kerr,  Gifford  &  Co.  (Inc.). — Kerr,  Gifford  &  Co.  (Inc.),  Port- 
land, Oreg.,  capitalized  at  $385,000,  exported  in  1921,  12,200,000 
bushels  of  wheat.  It  was  or^^anized  under  the  laws  of  Orej^on  in 
1917.  Peter  Kerr,  Portland,  president  of  the  company,  holds  the 
majority  of  the  stock.  The  firm  both  mills  and  does  a  general  mer- 
chandising business  in  grain,  flour,  feed,  and  cereals.  It  has  branches 
at  Seattle,  Spokane,  and  Alalia  Walla,  Wash.;  San  Francisco,  Calif.; 
Lewiston  and  Boise,  Idaho ;  and  La  Grande,  Pendleton,  and  Eugene, 
Oreg.  It  owns  the  Diamond  Flour  Mills  Co.,  The  Dalles,  Oreg. ;  the 
Merchants  Warehouse  Co.,  Portland,  Oreg.,  operating  terminal 
docks;  and  the  Kerr,  Gifford  Warehouse  Co.,  Portland,  Oreg.,  operat- 
ing country  warehouses. 

C.  F.  &  G.  W.  Eddy  (Inc.).— C.  F.  &  G.  W.  Eddy  (Inc.),  Boston, 
Mass.,  merchandises  hay  and  grain  and  exports  grain.  In  addition 
to  the  11,000,000  bushels  of  wheat  exported  in  1921  it  exported  more 
than  2,000,000  bushels  of  other  grain.  George  W.  Eddy,  president, 
Clinton  L.  Eddy,  treasurer,  and  B.  M.  C.  Eddy,  one  of  the  directors, 
hold  practically  all  the  stock.  It  was  organized  under  the  laws  of 
Massachusetts  in  1895. 

The  Grain  Growers  Export  Co.  (Inc.). — The  Grain  Growers 
Export  Co.  (Inc.),  New  York,  capital  stock  $390,000,  is  engaged 
solely  in  the  exportation  of  grain.  In  1921  it  exported  9,600,000 
bushels  of  wheat  besides  nearly  6,000,000  bushels  of  corn,  oats,  bar- 
ley, and  rye.  Its  president  is  Thomas  A.  Crerar,  Winnipeg,  who 
holds  3,500  shares  of  its  capital  for  the  account  of  the  United  Grain 
Growers  (Ltd.),  Winnipeg.  The  remaining  400  shares  are  held  by 
J.  J.  O'Donohoe,  New  York.  The  company  was  organized  under  the 
laws  of  New  York  in  1917. 

The  Melady  Grain  Co. — The  Melady  Grain  Co.,  New  York,  is  a 
partnership  organized  January  1,  1921.  It  is  an  exporter  of  grain, 
principally  wheat.  In  1921  it  exported  8,369,000  bushels  of  wheat 
and  over  500,000  bushels  of  rye.  The  partners,  John  Melady  and 
W.  F.  Kosar,  New  York,  own  interests  in  the  firm  of  75  and  25  per 
cent,  respectively. 

Wm.  H.  Muller  &  Co.  (Inc.).— Wm.  H.  Muller  &  Co.  (Inc.),  New 
York,  handles  grain,  minerals,  and  metals.  In  1921  it  exported 
8,215,000  bushels  of  wheat,  11,402,000  bushels  of  corn,  and  2,306,000 
bushels  of  other  grains.  It  is  capitalized  at  $25,000,  all  of  its  stock 
being  held  by  W.  H.  Muller  &  Co.,  The  Hague,  Netherlands,  which  in 
turn  has  offices  in  the  principal  receiving  grain  markets  in  the  world. 
It  was  organized  under  the  laws  of  New  York  early  in  1920. 

The  Norris  Grain  companies. — The  Norris  group  of  grain  firms 
consists  of  the  Norris  Grain  Co.,  Chicago,  111. ;  the  Norris  Grain  Co., 
New  York,  N.  Y, ;  and  the  Norris  Grain  Co.,  Kansas  City,  Mo.  In 
1921  this  group  exported  8,137,000  bushels  of  wheat  and  480,000  bush- 
els of  rye  and  corn. 

The  Norris  Grain  Co.  (Chicago). — The  Norris  Grain  Co.,  Chicago, 
merchandises  and  exports  grain.     It  is  capitalized  at  $1,000,000; 


CONTROL  AND  INTERRELATIONS.  49 

James  Norris,  Chicago,  president,  holding  9,362  shares;  C.  C.  Fields, 
Winnipeg,  vice  president,  518  shares;  and  Eobert  J.  Hanley,  Chicago, 
111.,  secretary  and  assistant  treasurer,  the  remaining  120  shares. 
These  three  officers  of  the  company  are  its  directors.  It  was  organ- 
ized in  1908  under  the  laws  of  Illinois. 

The  N orris  Grain  Co.  {Neio  York). — The  Xorris  Grain  Co.,  New 
York,  is  the  agent  of  the  XoitIs  Grain  Co.,  Chicago,  its  sole  business 
being  that  of  exporting  grain.  Its  capitalization  is  nominal — 
$5,000— the  stock  being  held  by  the  Norris  Grain  Co.,  Chicago. 
Walter  Trappe,  Xew  York,  president,  and  Eobert  J.  Hanley,  Chi- 
cago, treasurer,  are  its  directors.  It  was  organized  in  1916  under  the 
laws  of  Xew  York. 

The  N orris  Grain  Co.  {Kansas  City.,  Mo.). — The  Norris  Grain  Co., 
Kansas  City,  Mo.,  handles  grain.  It  has  a  branch  at  Wichita,  Kans. 
It  is  capitalized  at  $1,000,000 ;  James  Xorris,  president,  holding  about 
62  per  cent ;  Fred  C.  Hoose,  Kansas  City,  vice  president,  29  per  cent ; 
and  other  officers  and  directors  holding  the  remaining  shares.  It  was 
organized  in  1914  under  the  laws  of  Missouri. 

The  Northern  Grain  &  Warehouse  Co. — The  Northern  Grain  & 
Warehouse  Co.,  Portland,  Oreg.,  is  a  grain  merchandising  and  ex- 
porting firm,  having  branch  offices  at  Seattle  and  Spokane,  Wash., 
Helena,  Mont.,  and  San  Francisco  and  Los  Angeles,  Calif.  In  1921 
it  exported,  roundly,  6,000.000  bushels  of  wheat.  It  is  capitalized 
at  $1,200,000.  A.  Cohn,  president,  together  with  members  of  the 
Cohn  family,  hold  above  one-third  of  the  capital.  The  company  was 
organized  under  the  laws  of  Oregon  in  1909.  E.  A.  Strauss  &  Co. 
(Inc.),  New  York  (see  below),  capitalized  at  $200,000,  is  jointly 
owned  by  this  company  and  Strauss  &  Co.  (Ltd.),  London.  The 
Zaring  Grain  Co.,  American  Falls,  Idaho,  owner  of  grain  warehouses, 
capitalized  at  $15,000,  is  50  per  cent  owned  by  this  company.  The 
Cereal  Grading  Co.,  Minneapolis,  Minn.,  is  a  grain'  merchant  with 
terminal  elevators  for  buying,  storing,  cleaning,  selling,  and  shipping 
grain.  It  is  capitalized  at  $10,000,  74  per  cent  being  held  by  the 
Northern  Grain  &  Warehouse  Co. 

E.  A.  Strauss  &  Co.  (Ixc.).— E.  A.  Strauss«S:  Co.  (Inc.),  New  York, 
exports  grain  and  malt.  In  1921  it  exported,  roundly,  8,000,000 
bushels  of  wheat.  It  is  capitalized  at  $200,000.  It  is  a  subsidiary 
jointly  of  the  Northern  Grain  &  Warehouse  Co.,  Portland,  Oreg., 
and  Strauss  &  Co.  (Ltd.),  London.  Of  its  2,000  shares  the  former 
company  holds  944 ;  A.  Cohn,  president  of  both  the  E.  A.  Strauss  & 
Co.  (Inc.),  and  the  Northern  Grain  &  Warehouse  Co.,  1  share;  and 
James  P.  Livingston,  San  Francisco,  first  vice  president  and  director 
of  E.  A.  Strauss  &  Co.  (Inc.),  55  shares;  Strauss  &  Co.  (Ltd.)  holds 
948  shares ;  E.  A.  Strauss,  London,  chairman  of  the  board  of  direc- 
tors of  the  E.  A.  Strauss  &  Co.  (Inc.),  1  share;  Samuel  K.  Thorpe, 
London,  second  vice  president  and  director,  1  share ;  and  A.  H.  Hurst, 
New  York,  vice  president  and  director,  50  shares.  It  was  organized 
in  1919  under  the  laws  of  Delaware. 

C.  B.  Fox  Co.  (Inc.).— C.  B.  Fox  Co.  (Inc.),  New  Orleans,  La., 
exports  wheat  and  other  grain.  Its  wheat  export  in  1921  was 
7,939,000  bushels  and  its  corn  4,011,000  bushels.  It  is  capitalized  at 
$25,000,  C.  B.  Fox,  president,  holding  over  99  per  cent,  and  H.  L. 


50  METHODS   AND  OPERATIONS   OF  EXPORTERS. 

Daunoy,  New  Orleans,  vice  president,  and  W.  B.  Fox,  New  Orleans, 
secretary-treasurer,  holdino^  the  remainder.  It  was  or<ranized  in  1915 
under  the  laws  of  Louisiana. 

Albert  C.  Field  (Inc.).— Albert  C.  Field  (Inc.),  New  York,  ex- 
ports wheat,  corn,  rye,  barley,  and  oats.  Its  wheat  export  in  1921 
was  7,656,000  bushels,  its  corn  1,807,000  bushels,  and  its  rye,  barley, 
and  oats  863,000  bushels.  It  is  capitalized  at  $1,000,000,  Albert  C. 
Field,  New  York,  president,  holdino;  75  per  cent,  and  Robert  M. 
Morgan,  New  York,  vice  president  and  secretary,  holding  25  per  cent. 
It  was  organized  in  1905  under  the  laws  of  New  York.  This  company 
owns  100  shares  out  of  150  of  preferred  stock  (without  voting  rights) 
of  the  Gere  Grain  Co.,  New  York,  a  jobber  in  grain,  hay,  and  mill 
feeds.  There  are  27  shares  of  common  stock,  the  par  value  of  both 
classes  of  stock  being  $100. 

Po\VER,  Son  &  Co. — Power,  Son  &  Co.,  New  York,  is  a  partnership 
organized  in  1912.  It  is  both  a  domestic  dealer  in  and  an  exporter 
of  grain,  principally  wheat.  In  1921  it  exported  ,7,348,000  bushels 
of  wheat  and  390,000  bushels  of  rye,  oats,  and  barley.  O.  M.  Mitchell 
and  E.  P.  Mitchell  each  holds  25|  per  cent  of  the  stock,  while  Y.  Knee- 
land  and  A.  B.  Kneeland,  all  of  New  York,  each  holds  24^  per  cent. 

Balfour,  Guthrie  &  Co. — Balfour,  Guthrie  &  Co.,  San  Francisco, 
Calif.,  a  partnership,  has  branch  offices  at  Portland,  Oreg.,  and 
Seattle  and  Tacoma,  Wash.  It  exports  grain  and  lumber  principally. 
It  exported  in  1921,  5,941,000  bushels  of  wheat  and  3,319,000  bushels 
of  barley.  It  was  organized  in  1917.  Its  partners  are  Robert  Bal- 
four, Archibald  Williamson,  Alexander  B.  Williamson,  and  John 
Craik,  London,  England ;  Thomas  J.  Whitson,  Liverpool,  England ; 
John  Lawson,  San  Francisco,  Calif.;  Walter  J.  Bums,  Portland, 
Oreg. ;  and  Alexander  Baillie,  Seattle,  Wash.  The  partnership  of 
Balfour,  Williamson  &  Co.,  New  York,  general  importer  and  ex- 
porter, has  practically  the  same  membership  as  has  Balfour,  Guthrie 
&Co. 

The  Hall-Baker  grain  companies. — The  Hall-Baker  grain  com- 

eanies  are  the  Hall-Baker  Grain  Co.,  Kansas  City,  Mo.,  and  the 
[all-Baker  Grain  Co.,  New  York. 

The  Hall-Baker  Grain  Co.  (Kansas  City,  Mo.). — The  Hall-Baker 
Grain  Co.,  Kansas  City,  Mo.,  is  an  exporter  and  buyer  of  grain.  It 
has  branch  offices  at  Denver,  Colo. ;  Hastings,  Nebr. ;  and  Enid,  Okla. 
It  exported  in  1921,  4,361,000  bushels  of  wheat.  It  handles  much 
other  wheat  for  exporting  firms,  the  total  quantity  of  wheat  on  which 
it  declared  value  in  1921  being  11,352,000  bushels.  It  is  capitalized  at 
$500,000,  of  which  H.  F.  Hall,  Kansas  City,  president,  owns  50  per  cent 
and  F.  G.  Crowell,  vice  president,  25  per  cent.  The  Northern  Grain 
Co.,  Salina,  Kans. ;  the  Southern  Grain  Co.,  Wichita,  Kans. ;  and  the 
Little  Grain  Co.,  Hutchinson,  Kans.,  are  entirely  owned  by  this  firm. 
It  also  holds  70  per  cent  of  the  capital  stock  of  the  Hall-Baker 
Grain  Co.,  New  York.  (See  below.)  The  Hall-Baker  Grain  Co., 
Kansas  City,  was  organized  in  1903  under  the  laws  of  Missouri. 

The  Hali-Baher  Grain  Co.  {New  ForA;).— The  Hall-Baker  Grain 
Co.,  New  York,  is  an  exporter  of  wheat  and  coarse  grains.  In  1921  it 
exported  1,082,000  bushels  of  wheat.  It  is  capitalized  at  $100,000,  of 
which  the  Hall-Baker  Grain  Co.,  Kansas  City,  Mo.,  holds  70  per  cent; 
H.  Leverick,  New  York,  second  vice  president,  25  per  cent;  and  E.  V. 


CONTROL  AND  INTERRELATIONS.  51 

Phillips,  New  York,  secretary,  5  per  cent.  F.  G,  Crowell,  stock- 
holder and  vice  president  of  the  Hall-Baker  Grain  Co.,  Kansas  City, 
is  president  and  treasurer.  It  was  organized  in  January,  1921,  under 
the  laws  of  Maine. 

The  M.  H.  Houser  grain  companies. — The  M.  H,  Houser  grain 
companies,  located  at  Portland,  Greg.,  are  as  follows:  The  Pacific 
Grain  Co.,  and  the  Portland  Flouring  Mills  Co.  with  its  subsidiary, 
the  Pacific  Coast  Elevator  Co. 

The  Pacific  Grain  Co. — The  Pacific  Grain  Co.,  Portland,  Greg.,  is 
an  exporter  and  dealer  in  grain.  Its  wheat  export  in  1921  was 
5,214,000  bushels.  It  is  capitalized  at  $1,750,000,  M.  H.  Houser  holding 
the  entire  stock.  It  was  organized  in  1917  under  the  laws  of  Oregon, 
but  is  now  reported  as  inactive  since  August  1, 1921,  and  in  process  of 
liquidation.  This  company  holds  the  controlling  interest  in  each  of 
the  following  companies :  The  Intermountain  Milling  Co.,  Salt  Lake 
City,  Utah,  whose  grain  business  has  been  conducted  by  a  receiver 
since  August,  1921 ;  the  Farmers  Grain  &  Supply  Co.,  Lamont, 
Wash.;  Union  Grain  Co.,  Endicott,  Wash.;  Sweetwater  Elevator 
Co.,  Sweetwater,  Idaho;  and  Miller  Bros.  Grain  Co.,  St.  x\nthony, 
Idaho,  reported  as  practically  liquidated  on  December  31,  1921.  The 
last  four  firms  mentioned  are  warehouses.  The  Swift  Grain  Co., 
Detroit,  is  a  wholesale  merchandizing  firm,  capitalized  at  $77,200 
common  and  $44,910  preferred,  22  per  cent  of  the  preferred  being 
held  by  the  Pacific  Grain  Co. 

The  Portland  Flouring  Mills  Co. — The  Portland  Flouring  Mills 
Co.,  Portland,  Greg.,  is  a  flour  manufacturing  and  flour  and  grain 
dealing  and  exporting  firm,  the  exportation  of  wheat  being  a  small 
part  of  its  business.  In  1921  it  exported  about  120,000  bushels  of 
wheat.  Branch  offices  are  located  at  Albany,  Metalius,  and  Forest 
River,  Greg.,  and  at  Spokane,  Lind,  Dayton,  and  Prescott,  AVash. 
It  is  capitalized  at  $1,500,000,  of  which  M.  H.  Houser,  Portland, 
Greg.,  owns  the  controlling  interest.  It  holds  all  but  five  directors' 
qualifying  shares  out  of  2,000  ($100  par  value)  of  the  capital  stock  of 
the  Pacific  Coast  Elevator  Co.,  Portland,  a  public  grain  warehouse. 
It  is  reported  that  negotiations  are  under  way  for  the  sale  of  this 
company  and  its  subsidiary  to  the  Gray-Rosenbaum  Grain  Co., 
Seattle,  Wash.  This  firm  was  organized  in  1884  under  the  laws  of 
Oregon. 

MiLMiNE,  Bodman  &  Co.  (Inc). — Milmine,  Bodman  &  Co.  (Inc.), 
New  York,  deals  in  and  exports  wheat  and  other  grains.  In  1921  it 
exported  4,615,000  bushels  of  wheat,  1,095,000  bushels  of  corn,  and 
1,384,000  bushels  of  rye,  oats,  barley,  and  buckwheat.  It  is  capital- 
ized at  $250,000 ;  H.  L.  Bodman,  New  York,  president,  holding  82  per 
cent;  William  H.  Kemp,  New  York,  managing  director,  holding  10 
per  cent ;  F.  C.  Kirchhoff,  New  York,  vice  president,  4  per  cent ;  and 
H.  R.  Forster  and  John  A.  Kemp,  New  York,  2  per  cent  each.  This 
company  was  organized  in  1917  under  the  laws  of  New  York. 

Webb  &  Kenward  (Inc.). — Webb  &  Kenward  (Inc.),  New  York, 
is  a  grain-exporting  firm.  In  1921  it  exported  4,300.000  bushels  of 
wheat  and  1,200,000  bushels  of  corn.  It  has  3,000  shares  of  stock 
($100  par  value),  of  which  H.  L.  Webb,  Beaconsfield,  Buckingham- 
shire, England,  holds  1,425  shares;  C.  Kenward,  Croydon,  England, 
106205*— 22 6 


52  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

956  shares;  F.  C.  Joy,  London,  England,  119  shares;  A.  K.  Galloway, 
Loughton,  Essex,  England,  340  shares;  David  De  War,  Leith,  Scot- 
land, 23  shares;  and  George  Bingham,  West  Orange,  N,  J.,  137  shares. 
It  was  incorporated  in  1919  under  the  laws  of  New  York. 

H.  L.  Webb,  principal  stockholder  in  the  above  company,  has  a 
one-third  stock-holding  interest  in  the  Lange  Grain  Co.  (Inc.),  San 
Francisco,  Calif.,  a  grain  and  feed  merchandising  and  exporting 
concern,  capitalized  at  $100,000.  In  1921  it  exported  254,000  bushels 
of  barley. 

The  Commercial  Union  of  America  (Inc.). — The  Commercial 
Union  of  America  (Inc.),  New  York,  exports  sugar,  flour,  and  grain. 
In  1921  it  exported  3,616,000  bushels  of  wheat.  It  is  capitalized  at 
$700,000,  a  one-third  interest  being  held  by  each  of  the  following: 
N.  P.  Antoniades,  New  York,  president;  T.  J.  Mitrou,  New  York, 
secretary  and  treasurer;  and  Edgar  F.  Richards,  Baltimore,  vice 
president;  all  of  whom  are  also  directors.  It  was  organized  in  1918 
under  the  laws  of  New  York. 

Edgar  F.  Richards,  officer  and  director  of  the  above  firm,  is  also 
a  member  of  John  T.  Fahey  &  Co.,  a  Baltimore  grain  exporting  firm 
(see  below),  and  vice  president,  director,  and  stockholder  in  the 
Donahue-Fahey-Stratton  Corporation,  St.  Joseph,  Mo.,  a  domestic 
grain  dealing  firm  owned  jointly  by  John  T.  Fahey  &  Co.,  Balti- 
more, and  the  Donahue-Stratton  Co.,  Milwaukee,  Wis.,  a  grain  deal- 
ing and  exporting  firm.     (See  below.) 

John  T.  Fahey  &  Co. — John  T.  Fahey  &  Co.,  Baltimore,  Md.,  is 
a  grain  exporting  firm.  This  company  was  one  of  the  seven  which 
refused  to  furnish  information  requested  of  it  by  the  commission. 
(See  p.  63.) 

It  declared  value  on  wheat  exports  in  1921  (as  shown  by  the 
United  States  custom  records)  to  the  amount  of  11,366,000  bushels. 
Since  it  is  primarily  an  exporting  firm,  it  is  fair  to  assume  that  it 
bought  more  wheat  for  export  from  fobbers  who  declared  the  value 
than  it  sold  to  exporters  after  it  had  declared  the  value,  and  that  this 
quantity  represents  a  minimum  for  its  own  wheat  export.  Members 
of  and  closely  connected  with  this  firm  are  the  following:  John  T. 
Fahey,  J.  Carroll  Fahey,  Emerson  B.  Clarke,  Murphy  J.  Lee,  Edgar 
F.  Richards,  J.  Frank  Ryley,  and  Joseph  M.  Warfield. 

Of  the  1,500  shares  of  the  Donahue-Fahey-Stratton  Corporation, 
St.  Joseph,  Mo.,  a  domestic  grain  firm,  735  are  held  by  John  T.  Fahey 
&  Co.,  7^  by  Edgar  F.  Richards,  and  7|  by  J.  Carroll  Fahey.  The 
remaining  shares  are  held  by  the  Donahue-Stratton  Co.,  Milwaukee, 
Wis.,  a  grain  dealing  and  exporting  firm.     (See  below.) 

The  Donahue-Stratton  Co. — The  Donahue-Stratton  Co.,  Mil- 
waukee, Wis.,  has  a  branch  office  at  Chicago.  It  operates  grain  ele- 
vators, deals  in  grain  and  feedstuffs,  and  exports  grain.  In  1921  it 
exported  3,940,000  ^  bushels  of  wheat,  6,874,000  ^  bushels  of  corn,  and 
474,000^  bushels  of  rye.  The  company  is  capitalized  at  $500,000. 
The  combined  holdings  of  P.  P.  Donahue  and  L.  D.  Donahue  and 
the  holding  of  A.  M.  Stratton  amount  to  practicall}''  a  like  per  cent. 
The  company  was  organized  under  the  laws  of  Wisconsin. 

Schilthuis  American  Trading  Co. — Schilthuis  American  Trad- 
ing Co.,  New  York,  is  a  partnership  exporting  grain   and   grain 

'  Estimated  by  the  company. 


COISTROL   AND   INTERRELATION'S.  53 

products.  It  exported  in  1921,  2,919,000  bushels  of  wheat,  8,431,000 
bushels  of  corn,  and  759,000  bushels  of  rj^e,  oats,  and  barley.  It  was 
orfjanized  July  1,  1921,  its  partners  being  as  follows :  P.  W.  Schil- 
thuis,  Jan  S.'Schilthuis,  and  A.  P.  Schilthuis,  all  of  Eotterdam, 
Netherlands.    Each  partner  holds  a  one-third  interest  in  the  firm. 

Suzuki  &  Co. — Suzuki  &  Co.,  Kobe,  Japan,  has  branch  offices  in 
New  York  and  Seattle.  It  is  a  partnership  and  operates  as  importer 
and  exporter,  manufacturer,  and  ship  agent.  In  1921  it  exported 
from  the  United  States  2,175,000  bushels  of  wheat.  It  was  organized 
January  1,  1921,  at  Kobe,  Japan,  with  a  cajDital  of  50,000,000  yen, 
subscribed  by  its  partners,  all  of  Kobe,  Japan,  as  follows:  Yone 
Suzuki,  20,000.000  yen;  Iwajiro  Suzuki,  15,000,000  yen;  Iwazo 
Suzuki,  10,000,000  yen;  Fujimatsu  Yanagida,  2,500,000  yen;  Naokichi 
Kaneko,  2,500,000  yen. 

Mitsui  &  Co.  (Ltd.).— Mitsui  &  Co.  (Ltd.),  (The  Mitsui  Bursan, 
Kaisha  (Ltd.),  Tokyo,  Japan),  has  branches  in  all  parts  of  the 
world.  In  the  United  States  it  has  offices  in  New  York,  San  Fran- 
cisco, Seattle,  and  Portland.  It  exports  and  imports  flour,  wheat, 
and  other  grains,  lumber,  steel,  and  bags.  In  1921  it  exported  from 
the  United  States  1,900,000  bushels  of  wheat. 

The  Blake-Dobbs  Co.  (Inc.). — The  Blake-Dobbs  Co.  (Inc.),  New 
York,  is  a  grain  exporting  company.  In  1921  it  exported  1,808,000 
bushels  of  wheat,  163,000  bushels  of  rye,  and  77,000  bushels  of 
corn.  It  is  capitalized  at  $400,000  common  and  $100,000  preferred 
stock,  the  latter  having  no  voting  rights.  Thomas  M.  Blake  holds 
37|  per  cent  of  the  common  stock  and  all  of  the  preferred ;  Edward 
H.  Dobbs,  vice  president,  37^  per  cent  of  the  common ;  and  Bernard 
Diamont,  Antwerp,  Belgium,  vice  president,*  25  per  cent.  It  was 
organized  in  1919  under  the  laws  of  New  York. 

The  Langenberg  grain  companies. — The  Langenberg  grain  com- 
panies are  the  Langenberg  Hay  &  Grain  Co.  and  the  Langenberg 
Bros.  Grain  Co. 

The  Langenberg  Hay  &  Grain  Co. — The  Langenberg  Hay  &  Grain 
Co.,  New  Orleans,  La.,  is  a  receiving,  shipping,  and  exporting  firm. 
In  1921  it  exported  1,230,000  bushels  of  wheat,  1,443,000  bushels  of 
corn,  and  161,000  bushels  of  oats  and  barley.  It  is  nominally  a 
branch  of  the  Langenberg  Bros.  Grain  Co.,  St.  Louis  (see  below), 
but  is  a  separate  corporate  organization.  It  is  capitalized  at  $100,000, 
of  which  four  Langenberg  brothers,  St.  Louis,  hold  67.76  per  cent. 
H.  H.  Langenberg,  one  of  the  brothers,  also  holds  as  trustee  an  addi- 
tional 20  per  cent. 

The  Langenberg  Bros.  Grain  Co. — The  Langenberg  Bros.  Grain 
Co.,  St.  Louis,  Mo.,  handles  grain  and  hav,  exporting  grain  to  some 
extent.  In  1921  it  exported  354,000  bushels  of  wheat  and  68,000 
bushels  of  corn.  Of  its  3.250  shares  (par  value  $100)  capital  stock, 
H.  H.  Langenberg,  president,  holds  750;  C.  H.  Langenberg,  vice 
president,  900 ;  F.  W.  Langenberg,  300 ;  M.  L.  Langenberg,  400 ;  and 
A.  M.  Langenberg,  250 ;  a  total  of  80  per  cent.  This  company  was 
organized  in  1915  under  the  laws  of  Missouri. 

The  Updike  Grain  Co. — The  Updike  Grain  Co.,  Omaha,  Nebr., 
N.  B.  Updike,  owner,  is  a  grain-dealing  firm  with  branches  at  Chi- 
cago, Milwaukee,  Kansas  City,  and  Sioux  City.     It  exported  in  1921 

*  Office  resigned  Dec.  31,  1921. 


54  METHODS   AND   OPERATIONS   OF  EXPORTERS. 

1,393,000  bushels  of  wheat.  This  company  holds  a  one-half  interest 
in  the  partnership  of  the  H.  C.  Rurup  Grain  Co.,  of  Octavia,  Nebr., 
country  <^ain  dealer.  The  Edwin  Albright  Co.,  Beemer,  Nebr., 
local  dealer  in  lumber,  grain,  and  coal,  is  capitalized  at  $31,000,  of 
which  N.  B.  Updike  owns  38  per  cent ;  Edward  Updike,  Omaha,  9  per 
cent;  and  R.  B.  Updike,  Omaha,  3  per  cent;  while  Edwin  Albright, 
E.  C.  Albright,  and  Charles  S.  Albright,  all  of  Beemer,  Nebr.,  hold 
the  remaining  50   per  cent. 

Jas.  Carkuthers  &  Co.  (Inc.). — J  as.  Carruthers  &  Co.  (Inc.), 
New  York,  is  a  grain  exporter.  In  1921  its  wheat  exports  were 
1,324,000  bushels  and  its  exports  of  corn,  rye,  and  buckwheat  825,000 
bushels.  Of  its  6,000  shares  (par  value  $100),  James  Carruthers, 
Montreal,  Canada,  president,  holds  900;  George  A.  Carruthers,  Win- 
nipeg, Canada,  900;  Capel  Tilt,  Winnipeg,  Canada,  director,  900; 
T.  EL  Reeves,  Montreal,  Canada,  director,  720 ;  J.  A.  Allen,  Montreal, 
Canada,  420;  Frank  Carscadden,  Winnipeg,  Canada,  300;  H.  Moore, 
Montreal,  Canada,  60;  C.  W.  Band,  New  York,  vice  president,  900; 
C.  S.  Band,  New  York,  secretary  and  treasurer,  600;  P.  C.  Band, 
New  York,  director,  150;  and  R.  R.  McRoberts,  New  York,  150.  It 
was  incorporated  Noveml3er  10,  1920,  under  the  laws  of  New  York. 

Mitsubishi  Shoji  Kaisha  (Ltd.). — Mitsubishi  Shoji  Kaisha 
(Ltd.),  Tokyo,  Japan,  has  its  principal  office  at  Tokyo,  Japan,  and 
branch  offices  at  Seattle  and  New  York  and  in  all  the  principal 
cities  of  Europe  and  the  Far  East.  It  is  a  general  exporting  com- 
pany.    In  1921  it  exported  1,139,000  bushels  of  wheat. 

The  Cooperative  Wholesale  Society  (Ltd.). — The  Cooperative 
Wholesale  Society  (Ltd. ) ,  Manchester,  England,  has  a  buying  depot 
at  New  York  which  exports  grain  and  provisions.  In  1921  it  ex- 
ported 1,096,000  bushels  of  wheat.  It  is  a  federation  of  retail 
societies  of  Great  Britain  and  Ireland,  incorporated  in  England  but 
not  in  the  United  States. 

Paul,  Robson  &  Co. — Paul,  Robson  &  Co.,  New  York,  is  a  foreign 
partnership  operating  in  the  United  States  as  a  flour-buying  agency 
for  Ross  T.  Smyth  &  Co.,  Liverpool,  England.  Until  August,  1921, 
it  looked  after  the  wheat  shipments  of  the  Italian  ministry  of  food, 
having  declared  the  value  of  wheat  export  shipments  during  1921, 
prior  to  September,  amounting  to  2,608,000  bushels.  It  was  organ- 
ized early  in  1916  and  has  the  following  partners:  Edward  Paul, 
Liverpool,  England;  Hugh  R.  Rathbone,  London,  England;  and 
Herbert  T.  Robson,  London,  England. 

The  Wheat  Export  Co.  (Inc.). — The  Wheat  Export  Co.  (Inc.), 
New  York,  was  organized  in  1916  under  the  laws  of  New  York  as  the 
official  wheat-exporting  agency  for  the  allied  Governments.  In 
1919  it  exported  61,173,000  bushels  of  wheat,  and  in  1920,  8,018,000 
bushels.  It  has  been  inactive  since  early  in  1920  and  is  now  winding 
up  its  affairs  with  offices  at  the  British  ministry  of  shipping.  New 
York.  It  had  a  nominal  capitalization  of  $500  held  by  Herbert  T. 
Robson,  London,  partner  in  Paul,  Robson  &  Co.,  New  York  (see 
above),  2  shares;  W.  J.  Robson,  New  York,  2  shares;  G.  Rae  Cal- 
lendar.  New  York,  of  Paul  Robson  &  Co.,  2  shares;  Gerald  F.  Earle, 
of  Sanday  &  Co.,  New  York,  2  shares;  L.  M.  Pultz,  of  Sanday  &  Co., 
New  York,  1  share;  and  Kenneth  B.  Stoddart,  of  Sanday  &  Co., 
New  York,  1  share. 


CONTROL   AND   INTERRELATIONS.  55 

Section  4.  Foreign  connections  with  principal  American  exporters. 

Foreign  partnerships  with  American  grain  exporting  branches. — 
Ihe  two  iirms  ian*lving  the  highest  in  volume  of  exported  wheat  in 
1921,  having  a  combined  shipment  of  25.6  per  cent  of  the  total 
exported,  are  foreign  partnerships  having  American  branches : 
Samuel  Sanday  &  Co.,  London,  all  of  whose  partners  are  English, 
and  which  was  one  of  the  two  English  firms  whose  members  organ- 
ized the  Wheat  Export  Co.  (Inc.),  New  York,  the  official  agent  in 
America  for  the  allied  Governments  during  the  war;  and  Louis 
Dreyfus  &  Co.,  Paris,  a  French  partnership. 

Five  of  the  eight  partners  of  Balfour,  Guthrie  &  Co.,  San  Fran- 
cisco, a  Pacific  coast  exporting  firm,  are  English.  This  firm  shipped 
out  1.7  per  cent  of  the  total  wheat  exported  in  1921. 

Schilthuis  American  Trading  Co.,  New  York,  which  exported  nine- 
tenths  of  1  per  cent  of  the  wheat  exported  in  1921,  is  a  partnership 
whose  members  live  in  Holland. 

Suzuki  &  Co.,  Kobe,  Japan,  and  Mitsui  &  Co.  (Ltd.),  Tokyo,  are 
Japanese  partnerships  with  American  branches.  These  firms  ex- 
ported six-tenths  of  1  per  cent  each  of  the  total  wheat  exported  in 
1921. 

Paul,  Robson  &  Co.,  New  York,  is  an  English  partnership  operat- 
ing in  the  United  States  as  a  flour  buying  agency  of  Ross  T. 
Smyth  &  Co.,  Liverpool,  and  was  the  American  agency  for  the 
Italian  ministry  of  food  during  the  war. 

Foreign  holdings  in  principal  American  grain  exporting  corpo- 
rations.— Forty  per  cent  of  the  voting  capital  stock  of  P.  N.  Gray  & 
Co.  (Inc.),  New  York,  which  exported  5.5  per  cent  of  the  total  wheat 
shipped  out  in  1921,  is  owned  by  a  Belgian  firm.  Seventy-five  per 
cent  of  the  nonvoting  stock  is  held  by  Belgian  interests,  including 
that  held  by  an  Argentine  grain  firm  controlled  by  these  same  inter- 
ests. All  of  the  voting  stock  of  this  company  is  voted  by  four 
trustees — two  Americans  and  two  Belgians. 

The  Hansen  Produce  Co.  (Inc.),  New  York,  a  firm  which  exported 
4  per  cent  of  the  total  wheat  exported  in  1921,  is  owned  by  stock 
holders  in  Denmark  in  the  amount  of  80  per  cent  of  its  capital  stock. 

Ninety  per  cent  of  the  stock  of  the  Grain  Growers  Export 
Co.,  New  York,  is  owned  by  the  United  Grain  Growers  (Ltd.),  "Win- 
nipeg, a  Canadian  firm.  The  Grain  Growers  Export  Co.  shipped 
out  2.8  j)er  cent  of  the  wheat  exported  in  1921. 

The  entire  capital  stock  of  the  W.  H.  Muller  &  Co.  (Inc.),  New 
York,  which  exported  2.4  per  cent  of  the  total  wheat  exported  in 
1921,  is  owned  by  the  Dutch  firm,  Wm.  H.  Muller  &  Co.,  The  Hague. 

Forty-seven  and  one-half  per  cent  of  the  capital  stock  of  E.  A. 
Strauss  &  Co.  (Inc.),  New  York,  which  exported  2.3  per  cent  of  the 
export  wheat  in  1921,  is  English  owned. 

Practically  all  of  the  stock  of  Webb  &  Kennard  (Inc.)^  New  York, 
exporting  in  1921,  1.2  per  cent  of  the  wheat  exported,  is  owned  ^y 
English  parties. 

Twenty-five  per  cent  of  the  capital  stock  of  the  Blake-Dobbs  Co. 
(Inc.),  New  York*  is  owned  in  Belgium.  This  firm  exported  one- 
half  of  1  per  cent  of  the  total  exported  wheat  in  1921. 

Fifty  per  cent  of  the  capital  stock  of  the  Peoples  Industrial  Trad- 
ing Corporation,  New  York,  the  company  in  which  the  J.  Rosenbaum 


56  METHODS  AND  OPERATIONS   OF  EXPORTERS. 

Grain  Co.  and  Armour  Grain  Co.  are  jointly  interested,  is  owned  by 
a  Russian  company.  The  Peoples  Industrial  Trading  Corporation 
exported  two-fifths  of  1  per  cent  of  the  wheat  exported  in  1921. 

Of  the  Jas.  Carruthers  &  Co.  (Inc.),  New  York,  70  per  cent  of 
the  capital  stock  is  Canadian  owned.  Four-tenths  of  1  per  cent  of 
the  exported  wheat  in  1921  was  shipped  out  by  this  firm. 

The  Wheat  Export  Co.  (Inc.),  New  York,  active  dui'ing  and  just 
following  the  war  as  an  allied  Government  grain  exporting  agency, 
was  English  owned. 

Foreign  grain  companies  subsidiary  to  principal  American  grain 
EXPORTING  COMPANIES. — P.  N.  Gray  &  Co.  (Ltd.),  Winnipeg,  a  grain 
merchandising  firm  with  10,000  shares  capital  stock  of  no  par  value,  is 
owned  in  the  amount  of  70  per  cent  by  P.  N.  Gray  &  Co.  (Inc.), 
New  York. 

The  Armour  Canadian  Grain  Co.  (Ltd.),  Winnipeg,  a  general 
grain  merchant  with  $40,000  capital  stock,  is  entirely  owned  by  the 
Armour  Grain  Co.,  Chicago. 

Smyth,  Barnes  &  Co.  (Ltd.),  London,  a  grain  dealing  firm  with 
£50,000  capital  stock,  is  owned  in  the  amount  of  45  per  cent  of 
its  stock  by  the  Barnes- Ames  Co.,  New  York. 

The  Universal  Commission  Co.,  Winnipeg,  capitalized  at  $100,000, 
is  entirely  owned  by  the  Hansen  Produce  Co.  (Inc.),  New  York. 

Foreign  corporations  with  American  exporting  branches. — 
Mitsubishi  Shoji  Kaisha  (Ltd.),  Tokyo,  Japan,  is  a  Japanese  cor- 
poration with  exporting  branches  in  the  United  States.  It  exported 
three-tenths  of  1  per  cent  of  the  total  wheat  exported  in  1921. 

The  Cooperative  Wholesale  Society  (Ltd.),  Manchester,  England, 
has  a  buying  agency  in  the  United  States  which  exported  three-tenths 
of  1  per  cent  of  the  total  wheat  exported  in  1921. 

Section  5.  Summarization. 

Certain  facts  stand  out  in  this  survey  of  control  and  interrelations 
of  grain  exporters:  (1)  The  relatively  high  concentration  in  the  ex- 
portation of  grain;  (2)  the  intercompany  relations  of  certain  im- 
portant American  exporters;  and  (3)  the  hi^h  proportion  of  grain 
exported  by  foreign  companies  with  American  branches  and  by 
American  companies  controlled  by  foreign  interests. 

Out  of  some  90  companies  exporting  in  1921  any  wheat  what- 
soever, and  out  of  36  companies  reporting  to  the  commission,  which 
shipped  out  more  than  1,000,000  bushels  of  wheat  each  and  85  per 
cent  of  the  country's  entire  export,  two  exported  one- fourth  of  the 
total  and  eight  one-half.  Included  with  the  exports  of  each  com- 
pany in  this  statement  are  those  only  of  its  fully  controlled  and  regu- 
larly acknowledged  subsidiaries. 

Certain  intercompany  relations  may  be  noted.  P.  N.  Gray  &  Co. 
(Inc.),  ranking  third  in  volume  of  wheat  exported  in  1921,  is  joint 
owner  with  the  J.  Rosenbaum  Grain  Co.,  ranking  fifth,  of  the  Gray- 
Rosenbaum  Grain  Co.  (Inc.).  The  combined  exports  of  these  three 
companies  in  1921  were  about  10  per  cent  of  the  total.  The  J. 
Rosenbaum  Grain  Co.  is  also  affiliated  with  the  Armour  Grain  Co. 
throwgh  the  Peoples  Industrial  Trading  Corporation,  in  which  E.  F. 
Rosenbaum,  an  important  stockholder  in  the  J.  Rosenbaum  Grain 
Co.,  and  the  Armour  Grain  Co.,  are  largely  interested.  The  Barnes- 
Ames  Co.,  with  its  several  subsidiaries,  is  affiliated  with  the  Nye- 


CONTROL  AND  INTERRELATIONS. 


57 


Schneider-Fowler  Co.,  with  its  subsidiaries,  through  large  stock- 
holdings in  the  primary  companies  by  Julius  H.  Barnes ;  the  Northern 
Grain  &  Warehouse  Co.  controls  jointly  with  Strauss  &  Co.  (Ltd.), 
London,  E.  A.  Strauss  &  Co.  (Inc.).  Both  domestic  companies  are 
large  grain  exporters.  John  T.  Fahey  &  Co.  and  Donahue-Stratton 
Co.,  both  important  exporters,  are  joint  owners  of  the  Donahue- 
Fahey-Stratton  Corporation.  The  Commercial  Union  of  America 
(Inc.),  aji  exporter  of  considerable  importance,  is  affiliated  with  this 
group  through  Edgar  F.  Richards,  who  holds  a  one-third  interest 
in  the  latter  company  and  is  a  member  of  John  T.  Fahey  &  Co. 

Foreign  capital  is  largely  interested  in  the  exportation  of  grain 
from  the  United  States.  Out  of  the  36  companies  reporting  to  the 
commission  which  exported  85  per  cent  of  the  total  exported  wheat 
in  1921,  7  were  foreign  companies  with  American  branches  export- 
ing 29  per  cent  of  the  total,  2  cf  these  having  exported  25  per  cent. 
Of  the  remaining  29  companies,  7,  though  incorporated  in  the  United 
States,  have  50  per  cent  or  more  of  their  stock  held  by  foreign  stock- 
holders. These  exported  about  10  per  cent  of  the  total  exported 
wheat  in  1921.  Altogether  about  4G  per  cent  of  the  total  exported 
wheat  in  that  year  was  exported  by  foreign  companies  or  companies 
largely  (40  per  cent  of  the  stock  or  more)  controlled  by  foreign 
stockholders. 

Tables  18  and  19,  following,  show  the  principal  grain  exporting 
companies,  American  owned  and  foreign  owned,  respectively,  with 
quantities  of  wheat  exported  in  1921  and  percentages  of  total  ex- 
ported. 

Table  18. — Principal  grain  exporting  companies,  American  owned  to  the  extent 
of  50  per  cent  or  more  of  their  capital  stock,  tmth  quantities  of  reheat  ex- 
ported in  1921  and  percentages  of  total  exported. 

100  PER  CENT  AMERICAN  OWNED. 


Exporting  companies. 


Corporations: 

Barnes- Ames  Co.,  Duluth  and  New  York,  and  subsidiaries 

J.  Rosenbaum  Grain  Co.,  Chicago,  and  its  subsidiary,  Chesapeake  Ex- 
port Co.  (Inc.),  New  York 

Kerr,  Giflord  &  Co.  (Inc.)   Portland,  Oreg 

C.  F.  &  G   W.  Eddy  (Inc.),  Boston 

C.  B.  Fox  Co.  (Inc.),  New  Orleans 

Albert  C.  Field  (Inc.),  New  York 

Northern  Grain  &  Warehou.se  Co.,  Portland,  Oreg 

Hall-Baker  Grain  Co.,  Kansas  City  and  New  York 


Pacific  Grain  Co.,  Portland,  Oreg 

Milmme,  Bodman  &  Co.  (Inc.),  New  York 

Armour  Grain  Co.,  Chicago 

Donahue-Stratton  Co.,  Milwaukee 

Commercial  Union  of  America  (Inc.),  New  York 

Gray-Rosenbaum  Grain  C'o.  (Inc.),  Portland,  Oreg 

Langenberg  Bros.  Grain  Co.,  St.  Louis  and  New  Orleans. 


Total. 


Partnerships: 

Melady  Grain  Co.,  New  York. 
Power,  Son  &  Co.,  New  York . 


Total . 


Individual:  The  Updike  Grain  Co.,  Omaha,  Nebr. 
Total  100  per  cent  American  owned 


Percent 

of  total 

Bushels. 

United 

States 

export.' 

17,332,000 

5.0 

13,965,974 

4.0 

12,200,000 

3.5 

11,001,578 

3.2 

7,938,897 

2.3 

7,655,859 

2.2 

6,000,000 

1.7 

5,443,287 

1.6 

5,213,950 

1.5 

4,614,874 

1.3 

3,973,357 

1.2 

3,940,150 

1.1 

3,610,027 

1.0 

1,804,145 

.5 

1,584,740 

.5 

100,284,838 

30.8 

8,369,229 

2.4 

7,348,170 

2.1 

15,717,399 

4.0 

1,. 393, 300 

.4 

123,395,537 

35.8 

Total  wheat  exported  from  the  United  States,  1921,  including  Canadian  wheat,  344,965,520  bushels. 


58 


METHODS   AND   OPERATIONS   OF  EXPORTERS. 


Table  18. — Principal  grain  exporting  companies,  etc. — Continued. 

so  PER  CENT  OR  MORE,  AND  LESS  THAN  100  PER  CENT  AMERICAN  OWNED. 


Exporting  companies. 


Bushels. 


Per  cent 
of  total 
United 
States 
export. 


Corporations: 

P.  N.  Gray  &  Co.  (Inc.),2  New  York. . . 

Norris  Grain  Co.,*  Chicago,  111 

E.  A.  Strauss  &  Co.  (Inc.), 2  New  York. 
Blake-Dobbs  Co.  (Inc.),2  New  York 


19,081,944 
8,137,100 
8,000,000 
1,807,050 


5.5 

2.4 

2.3 

.5 


Total  50  per  cent  or  more  American  owned . 
Grand  total  domestic  companies 


37,029,094 


160,425,231 


46.5 


2  Incorporated  in  the  United  States. 

The  18  concerns  entirely  American  owned  exported  almost 
123,400,000  bushels  of  wheat  in  1921,  or  nearly  36  per  cent  of  the 
total  domestic  and  Canadian  wheat  exported  from  United  States 
ports  in  that  year;  while  the  4  corporations  having  some  foreign 
stockholder  exported  over  37,000,000  bushels,  or  almost  11  per  cent 
of  that  total. 

Table  19. — Principal  grain  exporting  companies,  foreign  mcned  to  the  extent 
of  50  per  cent  or  more  of  their  capital  stock,  with  quantities  of  tcJieat  ex- 
ported in  1921  and  percentages  of  total  exported. 

100  PER  CENT  FOREIGN   OWNED. 


Exporting  companies. 

Bushels. 

Per  cent 
of  total 
United 
States 
export  .1 

Corporations: 

Wm.  H.  MuUer  &  Co.  (Inc.),»  New  York 

8,215,365 
1,900,000 
1,138,614 
1, 096, 000 

2.4 

Mitsui  &  Co.  (Ltd.),3  Portland,  Oreg 

.6 

Mitsubishi  Shoji  Kaisha  (Ltd.), 3  Seattle ..            

.3 

Cooperative  Wholesale  Society  (Ltd.),'  New  York 

.3 

Total 

12,349,979 

3.6 

Partnerships: 

Sandav  &  Co.,<  New  York 

51,587,922 

36, 768, 353 

2,919,419 

2,175,000 

15.0 

Louis  Dreyfus  &  Co.,<  New  York 

10.7 

Schilthuis  American  Trading  Co.,<  New  York 

.8 

Suzuki  &  Co.,  <  Portland,  Oreg 

.6 

Total 

93,450,694 

27.1 

Total  100  per  cent  foreign  owned 

105,800,673 

30.7 

50  PER  CENT  OR  MORE,   AND   LESS   THAN  100  PER  CENT   FOREIGN   OWNED. 


Corporations: 

The  Grain  Growers  Export  Co.  (Inc.)  2  New  York 

9,612,975 
4,975,841 
4,300,000 
1,506,000 
1,324,000 

2.8 

Hansen  Produce  Co.  (Inc.),2  New  York 

1.4 

Webb  &  Kenward  (Inc.),2  New  York 

1.2 

Peoples  Industrial  Trading  Corporation,'  New  York 

.4 

Jas.  Carruthers  &  Co.  (Inc.),'  New  York 

.4 

Total 

21,718,816 

6.3 

Partnerships: 

Balfour,  Guthrie  &  Co.,  'Portland,  Oreg 

5,941,200 

1.7 

Total  50  per  cent  or  more  foreign  owned 

27, 660, 016 

ao 

Grand  total  foreign  companies 

133,460,689 

38.7 

*  Total  wheat  exported  from  the  United  States,  1921,  including  Canadian  wheat,  344,965,520  bushels. 
» Incorporated  in  the  United  States. 

'  Foreign  incorporated. 

*  Partners  and  principal  office  foreign. 
^  Five  of  the  eight  partners  foreigD. 


CONTROL  AND   INTERRELATIONS.  59 

Eight  foreign  concerns  exported  105,800,000  bushels  of  wheat,  or 
about  31  per  cent,  of  the  total  domestic  and  Canadian  wheat  shipped 
from  this  country  in  1921.  Two  of  these  concerns,  namely,  Sanday 
&  Co.  and  Louis  Dreyfus  &  Co.,  each  exported  from  two  to  three 
times  as  much  wheat  as  the  largest  domestic  company  and  its  sub- 
sidiaries. In  1921  the  14  foreign-controlled  exporters  shipped  almost 
133,500,000  bushels,  or  about  39  per  cent,  of  the  total  exports  from 
this  country. 

Section  6.  Control  and  interrelation  of  the  principal  fobbers  of  export 
grain. 

In  addition  to  the  firms  each  exporting  more  than  1,000,000  bushels 
of  wheat  in  1921  whose  control  and  interrelations  are  set  forth  in 
section  3  above,  many  of  whom  are  also  important  fobbers  of  export 
wheat,  there  are  presented  below  certain  firms  which,  while  export- 
ing in  1921  relatively  little  or  no  wheat,  fobbed  considerable  quanti- 
ties destined  for  the  export  market.  The  control  and  interrelations 
of  these  firms  are  here  treated  in  the  same  manner  as  were  those  of 
the  exporting  firms. 

Wallingfoed  Bros. — The  Wallingford  Bros.,  Wichita,  Kans.,  is 
a  dealer  in  grain  and  mill  feeds  and  a  large  fobber  of  export  wheat. 
It  has  five  branch  offices :  Ashland  and  Hutchinson,  Kans. ;  Enid, 
Okla. ;  Galveston,  Tex.,  and  New  Orleans,  La.  In  1921  it  declared 
value  on  7,783,000  bushels  of  export  wheat.  It  is  a  partnership,  the 
proportionate  share  of  each  of  the  following  partners  being  deter- 
mined each  year:  S.  P.  Wallingford,  Wichita,  Kans.,  and  C.  A. 
Wallingford,  E.  R.  Wallingford,  and  E.  G.  Wallingford,  Ashland, 
Kans. 

Simonds-Shields-Lonsdale  Grain  Co.  — The  Simonds-Shields- 
Lonsdale  Grain  Co.,  Kansas  City,  Mo.,  is  in  the  domestic  and  export 
grain  business,  and  is  a  large  fobber  of  export  grain.  It  has  branch 
offices  under  the  general  firm  name  at  New  York  City,  Wichita, 
Kans.,  and  Hastings,  Nebr.  In  1921  it  declared  value  on  5,603,000 
bushels  of  export  wheat  and  actually  exported  780.000  bushels. 
It  is  capitalized  at  $350,000.  C.  W.  Lonsdale,  Kansas  City,  president 
and  director,  holds  31  per  cent  of  the  stock;  the  estate  of  E.  W. 
Shields,  49|  per  cent;  Martha  D,  Shields,  Kansas  City,  ^  of  1  per 
cent.  It  owns  a  16  per  cent  interest  in  the  Atlas  Cereal  Co.  of 
Kansas  City,  Mo.  It  was  organized  in  1911  under  the  laws  of 
Missouri. 

Frisco  Elevators  Co. — The  Frisco  Elevators  Co.,  Kansas  City, 
Mo.,  is  an  exporter  and  shipper  of  grain  and  an  important  fobber 
of  export  wheat.  In  1921  it  declared  value  of  3,242.000  bushels  of 
export  wheat.  It  is  capitalized  at  $200,000,  of  which  F.  J.  Brodnax, 
Kansas  City,  president  and  director,  owns  81  per  cent.  It  was 
organized  in  1917  under  the  laws  of  Missouri. 

The  Moore-Lawless  Grain  Co. — The  Moore-Lawless  Grain  Co., 
Kansas  City,  Mo.,  is  a  grain  dealing  firm  and  an  important  fobber 
of  export  wheat.  It  has  three  branch  offices,  one  at  Leavenworth, 
Kans.,  one  at  Atchison,  Kans.,  and  one  at  Denver,  Colo.  In  1921  it 
declared  value  on  2,740,000  bushels  of  export  wheat.  It  is  capital- 
ized at  $105,000,  of  which  G.  A.  Moore,  vice  president  and  treasurer, 
and  C.  W.  Lawless,  secretary,  own  a  controlling  interest   (69  per 


60  METHODS   AND   OPERATIONS   OF  EXPORTERS. 

cent),  and  W.  H.  Meeker,  Alhambra,  Calif.,  president,  owns  5  per 
cent.  The  company  was  organized  in  1900  under  the  laws  of 
Missouri. 

The  Fort  Worth  Elevators  Co. — The  Fort  Worth  Elevators  Co., 
Fort  Worth,  Tex.,  is  an  exporter  and  importer  of  grain,  a  wholesale 
and  retail  grain  merchant,  and  does  a  public  storage  and  consign- 
ment business.  In  1921  it  declared  value  on  1,859,000  bushels  of  ex- 
port wheat.  It  has  1,400  shares  of  common  and  600  shares  of  pre- 
ferred stock  (par  value  of  each,  $500).  Jule  G.  Smith,  Fort  Worth, 
president,  holds  81  per  cent  of  the  common  and  75  per  cent  of  the 
preferred  stock.  The  remaining  stock  is  distributed  among  seven 
holders.    It  was  incorporated  in  1911  under  the  laws  of  Texas. 

RosENBAUM  Bros. — Eosenbaum  Bros.,  Chicago,  111.,  is  a  grain  ex- 
porter and  dealer  and  a  manufacturer  of  animal  feeds.  It  declared 
value  in  1921  on  1,860,000  bushels  of  export  wheat.  It  is  capitalized 
at  $1,000,000,  of  which  E.  L.  Glaser,  Glencoe,  111.,  president  and  di- 
rector, holds  32  per  cent,  and  M.  R.  Glaser,  Glencoe,  111.,  director, 
19  per  cent.  The  remainder  is  in  the  hands  of  ten  stockholders.  It 
was  organized  in  1920  under  the  laws  of  Illinois. 

Federal  Grain  Co. — The  Federal  Grain  Co.,  Kansas  City,  Mo.,  is 
a  grain  dealing  firm,  and  an  important  fobber  of  export  grain.  In 
1921  it  declared  value  on  1,607,000  bushels  of  export  wheat.  It  is 
capitalized  at  $250,000,  a  majority  of  its  stock  being  held  by  the 
Trans-Mississippi  Grain  Co.  (See  below.)  It  was  organized  in 
1913  under  the  laws  of  Missouri. 

Trans-Mississippi  Grain  Co. — The  Trans-Mississippi  Grain  Co., 
Omaha,  Nebr.,  is  a  grain  dealing  firm.  In  1921  it  declared  value  on 
696,000  bushels  of  export  wheat.  It  has  branches  in  12  towns  of  Ne- 
braska and  13  of  Iowa.  It  is  capitalized  at  $420,000,  F.  P.  Frazier, 
Chicago,  and  the  estate  of  W.  H.  Bartlett,  Chicago,  each  holding  13 
per  cent  of  the  stock.  These  holders  also  own  the  controlling  stock 
in  the  Bartlett-Frazier  Co.,  Chicago.  (See  below.)  H.  J.  Patten, 
Chicago,  director,  holds  4  per  cent  of  the  stock  of  this  company  and 
1|  per  cent  in  the  Bartlett-Frazier  Co.,  and  F.  S.  Cowgill,  Chicago, 
chairman  of  the  board,  holds  14  per  cent  of  the  stock,  while  in  the 
Bartlett-Frazier  Co.  he  owns  6  per  cent  and  in  the  Federal  Grain  Co., 
Kansas  City,  Mo.  (see  above),  2  per  cent.  The  Trans-Mississippi 
Grain  Co.  holds  a  controlling  interest  in  the  capital  stock  of  the  Fed- 
eral Grain  Co.  The  company  was  organized  in  1906  under  the  laws 
of  Nebraska. 

Bartlett-Frazier  Co. — Tlie  Bartlett-Frazier  Co.,  Chicago,  111.,  is 
a  grain  commission  and  merchandising  firm.  In  1921  it  declared 
value  on  572,000  bushels  of  export  wheat.  It  has  14  branch  offices  in 
most  of  the  principal  cities  of  the  United  States.  Its  capital  stock 
consists  of  5,000  shares  of  common  and  5,000  shares  of  preferred  (par 
value  of  each,  $100),  with  equal  voting  rights.  F.  P.  Frazier,  New 
York,  and  the  estate  of  W.  H.  Bartlett,  Chicago,  together  own  a  con- 
trolling interest.  These  stockholders  also  own  26  per  cent  of  the 
Trans-Mississippi  Grain  Co.,  Omaha,  Nebr,  (See  above.)  F.  S. 
Cowgill,  vice  president  and  director  of  Bartlett-Frazier  Co.,  owns  6 
per  cent  of  the  stock  of  the  latter  company,  holding  also  14  per  cent 
of  the  stock  of  the  Trans-Mississippi  Grain  Co.  and  2  per  cent  of  the 
stock  of  the  Federal  Grain  Co.,  Kansas  City,  Mo.     (See  above.)     H. 


CONTEOL  AlTD  INTERRELATIONS.  61 

J.  Patten,  Chicago,  holding  14  per  cent  of  the  stock  of  the  Bartlett 
Frazier  Co.,  owns  4  per  cent  of  the  Trans-Mississippi  Grain  Co.  W. 
E.  Hudson,  Chicago,  vice  president  and  director  of  the  Bartlett- 
Frazier  Co.,  ewns  11  per  cent  in  this  company  with  a  2  per  cent  hold- 
ing in  the  Federal  Grain  Co.  It  was  organized  under  the  laws  of 
Illinois. 

Marshall  Hall  Grain  Co. — The  Marshall  Hall  Grain  Co.,  St. 
Louis,  Mo.,  is  a  dealer  in  grain  and  an  important  fobber  of  export 
grain.  In  1921  it  declared  value  on  1,599,000  bushels  of  export 
wheat.  It  is  capitalized  at  $400,000.  Marshall  Hall,  St.  Louis, 
president,  holds  35  per  cent  of  the  capital ;  J.  S.  McGehee,  St.  Louis, 
Mo.,  33  per  cent;  and  G.  H.  Bridges,  Charleston,  Mo.,  22  per  cent. 
It  has  branch  offices  at  St.  Joseph,  Mo. ;  Des  Moines,  Iowa ;  and 
Omaha,  Nebr.,  operating  under  the  general  firm  name.  Marshall 
Hall  is  president  and  owner  of  the  Burlington  Grain  Elevator  Co., 
St.  Louis,  Mo.  The  Marshall  Hall  Grain  Co.  was  organized  in  1915 
under  the  laws  of  Missouri. 

The  J.  W.  Craig  Grain  Co.— The  J.  W.  Craig  Grain  Co.,  Wich- 
ita, Kans.,  is  a  grain  dealing  firm.  In  1921  it  declared  value  on 
1,104,000  bushels  of  export  wheat.  It  is  a  partnership  organized  in 
1918  with  J.  W.  Craig  and  O.  E.  Bedell  as  partners. 

E.  F.  Newing. — E.  F.  Newing,  Galveston,  Tex.,  a  partnership,  is  a 
grain  fobbing  firm.  It  declared  value  in  1921  on  1,090,000  bushels 
of  export  wheat.  It  was  organized  July  1,  1920,  E.  F.  Newing  hold- 
ing a  60  per  cent  and  Thomas  F.  Shaw  a  40  per  cent  interest  in  the 
partnership. 

Fuller  Grain  Co. — The  Fuller  Grain  Co.,  Kansas  City,  Mo.,  is  a 
grain  merchandising  firm.  In  1921  it  declared  value  on  906,000 
bushels  of  export  wheat.  It  is  capitalized  at  $50,000.  L.  A.  Fuller, 
Kansas  City,  president  and  director,  holds  a  controlling  interest  in 
the  capital  stock  (56  per  cent)  and  W.  W.  Fuller,  Kansas  City, 
treasurer  and  director,  11  per  cent.  It  was  organized  in  1918  under 
the  laws  of  Missouri. 

The  Wilcox-Hates  Co. — The  Wilcox-Hayes  Co.,  Portland,  Oreg., 
is  an  exporter  of  wheat,  flour,  and  lumber  and  an  importer  of 
oriental  products.  It  has  branch  offices  in  Kobe,  Japan,  and  Shang- 
hai, China.  In  1921  it  declared  value  on  914,000  bushels  of  export 
wheat.  Its  capital  stock  consists  of  100  shares  common  and  500 
shares  preferred  (par  value  each,  $100).  Voting  power  rests  with 
the  common  stock.  R.  B.  Wilcox,  Portland,  Oreg.,  president  and 
director,  owns  all  preferred  and  38  per  cent  of  the  common;  G.  V. 
Hayes,  Portland,  Oreg.,  vice  president  and  director,  holds  40  per 
cent;  and  J.  S.  Campbell,  Portland,  secretary,  holds  20  per  cent.  It 
was  organized  in  1919  under  the  laws  of  Oregon. 

Great  West  INIill  &  Elevator  Co.-— The  Great  West  Mill  &  Ele- 
vator Co.,  Amarilla,  Tex.,  is  an  exporting  and  fobbing  firm.  In  1921 
it  declared  value  on  721,000  bushels  of  export  wheat.  It  is  capital- 
ized at  $600,000,  Frank  Kell,  Wichita  Falls,  Tex.,  president  and 
director,  holding  48  per  cent,  and  T.  C.  Thatcher,  Oklahoma  City, 
Okla.,  10  per  cent.  The  remaining  stock  is  held  in  holdings  of  5  per 
cent  or  less. 

Edward  R.  Bacon  Grain  Co. — The  Edward  R.  Bacon  Grain  Co., 
Chicago,  111.,  is  a  grain  merchandizing  firm.    It  has  a  branch  office 


62  METHODS   AND   OPEKATTONS   OF   EXPORTERS. 

in  Boston,  Mass.    In  1921  it  declared  value  on  646,000  bushels  of  ex- 
port Avheat.     It  is  capitalized   at  $150,000,  of  which  Edward  E,. 
Bacon  holds  the  entire  amount.    It  was  organized  in  1919  under  the  i 
laws  of  Illinois. 

Taylor  &  Bournique  Co. — The  Taylor  &  Bournique  Co.,  Mil- 
waukee, Wis.,  is  a  grain  merchandising  firm.  It  has  two  branch 
offices — one  in  New  York  and  one  in  Buffalo,  N.  Y.  In  1921  it  de- 
clared value  on  433,000  bushels  of  export  wheat.  It  is  capitalized  at 
$500,000  (1,000  shares  of  common  and  4,000  shares  of  preferred). 
L.  G.  Bournique,  Milwaukee,  and  the  estate  of  A.  K.  Taylor,  Mil- 
waukee, each  holds  48  per  cent  of  the  stock.  It  was  organized  in 
1916  under  the  laws  of  Wisconsin. 

J.  C.  Shaffer  Grain  Co. — The  J.  C.  Shaffer  Grain  Co.,  Chicago, 
111.,  is  a  grain-merchandizing  firm,  receiving,  elevating,  and  ship- 
ping grain.  It  has  six  branch  offices  in  towns  of  Illinois.  It  declared 
value  in  1921  on  401,000  bushels  of  export  wheat.  It  is  capitalized 
at  $1,500,000.  Carroll  Shaffer,  Evanston,  111.,  treasurer  and  director, 
holds  47  per  cent  of  the  stock ;  J.  C.  Shaffer,  Evanston,  111.,  president 
and  director,  owns  12  per  cent ;  and  Kent  Shaffer,  Denver,  Colo.,  17 
per  cent.  The  J.  C.  Shaffer  Grain  Co.  owns  the  stock  of  the  South 
Chicago  Elevator  Co.  (capital  stock  $665,000).  It  was  organized  in 
1920  under  the  laws  of  Illinois. 

F.  S.  Lewis  &  Co. — F.  S.  Lewis  &  Co.,  Chicago,  111.,  with  a 
branch  at  New  York,  is  a  grain  commission  firm.  In  1921  it  declared 
value  on  298,000  bushels  of  export  wheat.  It  is  capitalized  at 
$220,000.  F.  S.  Lewis,  of  Chicago,  holds  43  per  cent  of  the  stock 
and  T.  J.  Sullivan,  Chicago,  secretary  and  treasurer,  22  per  cent.  It 
was  organized  in  1915  under  the  laws  of  Illinois. 


f 


Chapter  VI. 

INVESTMENT  AND  EARNINGS. 

Section  1.  Source  of  information. 

Investments  and  earnings  and  the  net  profit  per  bushel  are  pre- 
sented for  27  domestic  companies  engaged  in  exporting  and  selling 
grain  for  export  in  1921,  while  the  same  information  is  shown  for  a 
somewhat  smaller  number  of  companies  in  1920.  Five  other  com- 
panies are  branches  of  foreign  houses,  and  their  records  in  this  country 
did  not  show  their  investment  or  earnings,  w^hile  the  records  of  another 
company  were  incomplete.  In  addition  to  their  own  direct  exports 
many  of  the  companies  sold  large  quantities  of  grain  to  other  ex- 
porters f.  o.  b.  vessel  at  the  port  of  shipment.  Such  transactions  are 
designated  in  the  trade  as  fob  sales,  and  this  branch  of  the  business 
is  designated  as  fobbing,  and  concerns  engaged  in  fobbing  are  termed 
fobbers.  On  account  of  the  importance  of  this  branch  of  the  business 
the  records  of  the  more  important  fobbers  were  examined  and  their 
investments  and  earnings  are  presented.  Some  of  the  largest  ex- 
porters, particularly  foreign  houses  with  branches  in  this  country, 
purchase  the  bulk,  if  not  all,  of  their  export  shipments  from  fobbers. 

All  of  the  information  presented  in  this  chapter  was  obtained 
directly  from  the  books  and  records  of  exporters  and  fobbers  by 
examiners  of  the  commission.  Most  of  the  companies  promptly 
granted  access  to  their  records  and  gave  valuable  assistance  to  the 
commission's  examiners.  The  records  of  all  important  exporters  and 
fobbers  selling  through  the  Gulf  and  Atlantic  seaboard  ports,  except 
those  of  six  fairly  important  ones  in  the  Baltimore  market,  were 
examined.  The  exporters  in  the  Baltimore  markets,  following  the 
advice  of  their  counsel,  refused  the  commission's  examiners  access 
to  their  records,  and  the  commission  is  now  taking  legal  steps  to 
secure  access  to  the  records  of  the  concerns  involved.  The  exporters 
refusing  access  included  the  Baltimore  Grain  Co. ;  C.  P.  Blackburn 
&  Co. ;  J.  T.  Fahey  &  Co. ;  Gill  &  Fisher ;  Hammond,  Snyder  &  Co. ; 
and  H.  C.  Jones  &  Co.  These  companies  probably  handled  in  the 
aggregate  not  less  than  20,000,000  bushels  of  wheat  in  1921. 

Section  2.  Condition  of  accounting  records. 

General  condition. — The  records  of  a  majority  of  the  concerns  en- 
gaged in  the  export  grain  business  which  were  investigated  are  com- 
plete enough  to  sliow  financial  results  as  a  whole  accurately.  Only  a 
few  were  found  where  any  difficulty  was  experienced  in  getting  balance 
sheets  and  profit  and  loss  statements  which  agreed  with  the  balance 
sheets,  but  the  commission's  examiners  found  considerable  difficulty 
in  obtaining  all  of  the  information  required  to  answer  the  Senate 
resolution.  This  was  due  to  the  manner  in  which  the  exporters 
keep  their  records.  The  companies  themselves  are  interested  pri- 
marily in  records  which  will  show  net  results  from  total  operations, 

63 


64  METHODS   AND   OPERATIOlsrS   OF  EXPORTERS. 

whereas  the  commission,  in  attempting  to  answer  the  resolution, 
sought  to  obtain  data  which  would  show  the  results  of  handling  each 
kind  of  grain,  segregating  the  domestic  from  the  export  business. 

Although  the  records  in  many  cases  were  very  complete,  their 
condition  was  such  that  it  required  a  great  deal  of  time  to  assemble 
the  data  required  by  the  commission.  One  large  exporter,  M'ho  also 
did  considerable  domestic  business,  had  complete  ledger  accounts  of 
grains,  showing  quantities  and  values.  However,  the  incidental 
items  in  the  grain  account  requiring  analysis  were  found  in  the 
cash  book,  the  sales  journal,  and  two  series  of  numbered  vouchers. 
Many  other  companies'  records  were  in  similar  condition. 

Quantities  of  grain  handled. — The  companies,  being  primarily 
interested  only  in  financial  results,  gave  very  little  attention  to  the 
quantity  of  grain  purchased  and  sold.  Only  a  few  of  the  exporters 
show  in  their  grain  accounts  or  their  ledgers  the  number  of  bushels 
purchased,  sold,  or  in  inventory.  In  some  cases  the  quantities  were 
shown  in  the  cash  journals  opposite  each  purchase  and  sale.  In 
such  cases  it  was  necessary,  however,  to  segregate  and  total  these 
entries  to  get  annual  totals,  and  as  there  were  no  control  figures, 
errors  that  might  have  been  made  could  not  be  detected.  In  many 
cases  the  quantities  of  grain  handled  could  only  be  obtained  by 
referring  to  the  vouchers  and  invoices,  and  as  these  papers  were 
often  not  filed  so  as  to  be  readily  accessible,  it  required  considerable 
time  to  secure  the  necessary  information. 

The  cost  or  grain. — The  cost  of  the  different  grains  handled  was 
very  difficult  to  secure.  None  of  the  companies  whose  records  were 
examined  kept  them  in  such  condition  as  would  clearly  show  the 
net  sales  or  the  net  cost  of  the  different  grains  purchased  and 
sold  without  an  analysis  of  their  grain  accounts.  A  majority  of  the 
companies  keep  separate  ledger  accounts  for  each  kind  of  grain 
sold,  but  in  order  to  obtain  an  analysis  of  the  net  cost  of  grains  and 
net  sales  it  was  necessary  to  refer  to  the  books  of  original  entry,  and 
often  to  the  vouchers  and  invoices  from  which  the  entries  were  made. 

Some  of  the  companies  kept  only  one  ledger  account  for  all  grains 
purchased  and  sold,  in  which  all  debits  and  credits  were  entered.  In 
order  to  enable  the  commission  to  determine  the  costs,  realizations, 
and  margins  on  each  kind  of  grain  sold,  it  was  necessar^^  to  make  a 
complete  analysis  of  this  account.  The  purpose  of  analyzing  these 
figures  was  to  determine  first,  all  items  chargeable  to  tlie  different 
grains  purchased,  such  as  domestic  freight,  storage,  and  handling 
charges;  second,  the  items  which  should  be  deducted  from  gross  sales 
of  the  different  grains  in  order  to  obtain  the  net  realization  at  place 
of  sale,  such  as  commissions,  prepaid  ocean  freight,  and  marine  in- 
surance; and  third,  other  items  such  as  hedges  and  interest. 

Most  of  the  concerns  engaged  in  the  business  of  exporting  and 
fobbing  grain  from  the  Atlantic  seaboard  ports  were  not  engaged 
in  the  domestic  grain  business,  while  those  with  offices  at  the  prin- 
cipal terminal  markets,  such  as  Chicago  or  Kansas  City,  Avere  iden- 
tified with  both  the  domestic  and  export  phases  of  the  grain  trade. 
For  many  of  the  Atlantic  seaboard  firms  it  was  impossible  to  seg- 
regate the  cost  of  their  grain  exported  from  that  sold  f.  o.  b.  vessel 
for  export.  The  export  business  of  the  interior  grain  companies 
was  small  when  compared  with  their  total  business,  but  the  fob  sales 


INVESTMEISTT   AND   EARNINGS. 


65 


of  these  concerns  were  large  as  compared  with  the  quantities  which 
they  exported  directly  to  foreign  countries. 

Section  3.  Nature  of  export  business. 

The  business  of  export  concerns  whose  records  were  examined  was 
not  homogeneous,  and  there  were  marked  differences  in  the  field  of 
operations  of  different  companies.  The  purchases  of  some  domestic 
exporters  were  largely  made  directly  from  country  elevators  or 
from  the  producer,  while  others  made  the  bulk  of  their  purchases 
f.  o.  b.  (free  on  board)  vessel  at  Atlantic  or  Gulf  seaboard.  The 
sales  of  these  concerns  were  usually  made  for  delivery  to  the  foreign 
purchaser  at  the  foreign  port  of  destination.  Another  important 
group  included  the  so-called  fobbers  who  purchased  grain  in  the 
interior  for  the  purpose  of  selling  to  exporters  f.  o.  b.  vessel  at 
seaboard.  Some  companies  did  a  mixed  fobbing  and  exporting  busi- 
ness; they  are  grouped  here  according  to  the  predominant  character 
of  their  trade,  and  the  profits  shown  are  those  for  the  entire  grain 
business.  The  purchases  of  foreign  concerns  with  branches  in  this 
country  were  usually  made  f.  o.  b.  vessel  at  seaboard,  while  their 
sales  were  made  directly  to  the  consumer  in  foreign  countries. 

Section  4.  Proportion  of  exports  presented. 

While  there  were  about  90  concerns  engaged  in  exporting,  a  com- 
paratively small  number  handle  the  bulk  of  the  grain  exported  from 
the  United  States.  (See  p.  42.)  As  already  stated,  a  number  of 
the  companies  whose  records  were  examined  exported  grain  grown 
in  both  the  United  States  and  Canada,  and  the  quantities  of  Cana- 
dian grain  could  not  always  be  obtained.  The  comjmnies  whose 
records  were  examined  exported  about  275,000,000  bushels  of  wheat, 
almost  65,000,000  bushels  of  corn,  31,500,000  bushels  of  rye,  and 
8,100,000  bushels  of  barley  in  1921.  The  following  table  shows  the 
quantities  of  the  different  grains  exported  or  sold  f.  o.  b.  vessel  for 
export  for  the  companies  examined  in  their  business  years  ending 
in  1920  and  1921. 

Table  20. — Quantity  of  the  principal  grains  exported  or  fobbed  by  companies 
examined  by  the  commission  in  their  business  years  ending  1920  and  1921. 


Grain. 


Wheat 

Corn 

Rye 

Barley 

Buckwheat 
Kaffir,  etc.. 
Oats 


Export  sales. 


Bushels. 

274,643,126 

64,952,613 

31,527,382 

8, 104, 264 

235,125 

197,228 

14,474,842 


1920 


Bushels. 
72, 239, 148 

3,174,049 
31,964,577 

4,293,590 
196,628 


12,292,326 


Fob  sales. 


1921 


Bushels. 

101,568,368 

6, 302, 038 

6, 368, 259 

1, 730, 856 

30,324 

2,131 

512,414 


Bushels. 

36,318,680 

665,  S35 

11,081,175 

2,170,563 

37, 737 


5,313,293 


The  quantities  shown  above  include  the  business  of  nearly  all 
of  the  large  exporters  shipping  from  the  Gulf  and  Atlantic  sea- 
board ports  and  in  addition  the  fob  sales  of  the  larger  fobbers 
supplying  exporters  at  those  ports.  In  order  to  make  the  informa- 
tion available  at  the  earliest  possible  date  tlie  records  of  exporters 
having  offices  on  the  Pacific  coast  were  not  examined,  and,  as  already 


66  METHODS   AND   OPEKATIONS   OF  EXPORTERS. 

explained,  the  books  and  records  of  concerns  with  offices  in  Balti- 
more were  not  examined. 

The  exact  proportion  of  the  total  domestic  exports  of  the  different 
grains  which  were  made  by  the  concerns  whose  records  were  ex- 
amined can  not  be  stated  for  two  reasons,  first,  the  business  years 
of  the  different  firms  did  not  end  in  the  same  month,  and  second, 
some  companies  exported  considerable  quantities  of  Canadian  grain, 
particularly  wheat  and  oats.  However,  the  proportion  of  domestic 
wheat,  rye,  oats,  and  barley  exported  by  the  companies  whose  records 
were  examined  was  very  large.  In  1921  probably  over  80  per  cent 
of  the  wheat  exported  from  the  Gulf  and  Atlantic  seaboard  ports, 
nearly  all  of  the  oats,  80  per  cent  of  the  rye,  and  80  per  cent  of  the 
barley  were  made  by  the  firms  whose  records  were  examined. 

As  already  stated,  the  results  shown  in  the  above  table  are  for  the 
business  years  of  the  different  firms  ending  in  the  year  indicated. 
Most  of  the  companies  having  offices  on  the  Atlantic  seaboard  closed 
their  business  year  December  31,  while  most  of  the  concerns  located 
in  the  interior  cities  closed  their  business  years  June  30.  As 
shown  in  Chapter  VII,  the  United  States  Grain  Corporation 
was  operating  during  1919  and  1920,  so  that  the  quantities  shown 
above  (1920)  do  not  represent  all  of  the  export  shipments  of  the 
various  grains  covered  by  this  report.  During  1921,  however,  t?ie 
exportation  of  grain  was  all  done  by  private  companies.  The  quan- 
tities shown  for  fob  sales  were  partly  sold  to  exporters  whose 
records  were  examined. 

Section  5.  Method  of  computing  investment  and  earnings. 

Investment  in  grain  business. — The  net  investment  was  com- 
puted from  the  liabilities  side  of  the  balance  sheet  and  included 
the  capital  stock,  surplus,  and  reserves,  such  as  reserves  for  excess 
profits  taxes  and  bonuses  which  were  properly  a  part  of  surplus. 
From  this  total  was  deducted  any  outside  investments,  such  as  in- 
vestments in  enterprises  not  connected  with  the  grain  business  or 
in  Liberty  bonds  or  similar  securities,  in  order  to  obtain  the  stock- 
holders' net  investment  in  the  grain  business.  As  there  is  a  wide 
variation  in  the  amount  of  money  used  in  the  grain  business  at 
different  periods  of  ^he  year,  the  commission  has  used  the  mean  in- 
vestment, which  was  obtained  by  taking  a  simple  average  of  the 
investment  at  the  beginning  and  at  the  end  of  the  business  year. 

To  show  more  accurately  how  much  capital  the  companies  actually 
used  in  the  grain  business  it  was  necessary  to  take  into  consideration 
borrowed  money,  which  for  the  companies  examined  consisted 
entirely  of  notes  payable.  As  already  shown,  the  amount  of  these 
loans  was  constantly  fluctuating,  and  it  happened  in  a  few  cases 
that  a  company  would  have  large  borrowings  in  most  months  but 
no  notes  payable  outstanding  at  the  close  of  its  business  year.  In 
order  to  show  more  accurately  the  actual  amount  of  money  used  in 
the  grain  business  the  average  of  the  notes  payable  at  the  end  of 
each  month  was  taken  and  used  as  the  borrowings  of  the  company. 
This  average  was  added  to  the  stockholders'  investment,  as  above 
described,  in  order  to  obtain  the  total  funds  used  in  the  grain 
business. 

Earnings  from  grain  business. — In  order  to  show  the  exact  earn- 
ings derived  from  the  grain  business  the  commission  deducted  from 


INVESTMENT  AND  EARNINGS.  67 

the  total  earnings  from  all  sources  any  income  from  outside  sources, 
such  as  dividends  and  interest  received  from  outside  investments. 
This  latter  total  included  the  loss  or  gain  from  transactions  in  grain 
futures,  which  are  shown  separately.  The  rate  of  earnings  on  the 
total  funds  employed  in  the  business  (see  p.  71),  including  capital 
stock,  surplus,  reserves,  and  borrowed  money,  was  based  on  the  earn- 
ings just  described;  while  the  rate  of  profit  on  the  stockholders'  in- 
A'estment,  i.  e.,  capital  stock,  surplus,  and  reserves  (see  p.  70),  was 
computed  on  the  basis  of  the  earnings  described  above,  less  the  in- 
terest paid  on  borrowed  funds. 

Profits  are  shown  both  including  and  excluding  gains  or  losses 
from  transactions  in  futures.  These  transactions  were  generally 
hedges  employed  to  reduce  the  business  risks,  but  apparently  to  some 
extent  they  were  purely  speculative  ventures.  In  the  wheat  market, 
future  trading,  which  was  suspended  during  the  war,  was  not  re- 
sumed until  July  15,  1920;  consequently  the  results  for  companies 
closing  their  business  year  June  30,  1920,  showed  no  future  trading 
in  wheat. 

Earnings  by  grains. — The  earnings  per  bushel  were  computed  for 
the  different  kinds  of  grain  by  adding  to  the  items  of  cost  specifically 
charged  to  each  grain  by  the  companies  those  not  so  distributed.  Some 
of  the  companies  engaged  in  the  export  business  made  some  fob  sales, 
but  their  records  did  not  show  the  costs  of  their  export  and  fobbing 
business  separately,  and  it  was  not  considered  feasible  to  attempt 
such  a  distribution.  The  companies  located  in  New  Orleans,  Phil- 
adelphia, New  York,  and  Boston  had  comparatively  small  fob  sales. 
The  firms  classed  as  fobbers  operating  at  interior  points  such  as  Chi- 
cago, Kansas  City,  and  St.  Louis,  in  addition  to  their  fob  and 
domestic  sales,  exported  comparatively  small  quantities.  The  gains 
and  losses  from  transactions  in  futures  usually  required  no  allocation 
to  the  different  g'rains,  but  where  no  distribution  was  made  by  the 
companies,  or  only  a  partial  one,  the  allocation  was  made  on  the 
basis  of  the  quantity  of  each  grain  sold. 

The  general  and  administrative  expenses  were  not  distributed  by 
the  companies.  In  order  to  show  net  per  bushel  profits  these  ex- 
penses were  distributed  by  grains  on  the  basis  of  the  quantities  sold. 
In  the  case  of  the  fobbers,  some  of  whom  operated  elevators,  no  gen- 
eral or  administrative  expense  was  allocated  to  the  grain  handled 
through  the  elevators  for  outsiders  as  this  quantity  was  compara- 
tively small.  If  a  part  of  the  general  and  administrative  expenses 
was  so  allocated,  the  maximum  difference  in  result  for  a  particular 
company  would  have  been  less  than  two-tenths  of  1  cent  per  bushel. 

In  the  income  account  (see  p.  69),  the  amounts  for  the  net  sales 
are  first  shown,  and  from  this  total  the  cost  of  sales  was  deducted  in 
order  to  obtain  the  gross  trading  profits.  The  general  and  adminis- 
trative expenses  were  deducted  from  the  gross  trading  profit  in  order 
to  obtain  the  net  trading  profit  from  cash  sales.  The  profit  or  loss 
from  transactions  in  futures  were  shown  separately  in  order  to  show 
the  net  profit  or  loss  in  the  cash  grain  business.  There  were  also 
certain  other  items  of  income  or  expense,  such  as  canceled  contracts, 
exchange,  commissions,  and  interest  and  dividends  from  outside  in- 
106205°— 22 7 


68 


METHODS   AND   OPERATIOlSrS   OF   EXPORTERS. 


vestments,  which,  when  combined  with  the  total  profit  for  all  grains, 
gives  the  total  net  income  of  the  companies  from  the  grain  business. 

Section  6.  Investment  in  the  export  grain  business. 

Importance  of  borrowed  funds. — The  export  grain  trade  is  essen- 
tially a  merchandising  business  and  a  large  part  of  the  funds  em- 
ployed is  borrowed  money.  The  companies  engaged  principally  in 
exporting  or  fobbing,  as  a  rule,  have  comparatively  small  amounts 
in  fixed  investment,  while  those  owning  country  elevators  and  also 
terminal  facilities  show  considerable  fixed  capital.  The  borrowed 
money  employed  in  the  business  consisted  mostly  of  short-time  loans 
and  the  amounts  borrowed  showed  a  marked  variation  for  different 
months.  The  amount  of  money  borroAved  by  a  given  company  varies 
directly  with  the  volume  of  business  transacted.  There  was  consid- 
erable fluctuation  in  the  month  of  largest  exports  for  different  3^ears 
and  likewise  for  the  different  grains. 

As  soon  as  grain  is  purchased  loans  can  be  secured  by  using  the 
bills  of  lading  as  collateral.  This  enables  an  exporter  or  fobber  to 
do  a  very  large  business  with  a  relatively  small  investment.  Experi- 
ence, ability,  a  thorough  knowledge  of  the  export  grain  business,  and 
good  connections  in  importing  countries  are  more  essential  to  success 
than  the  financial  strength  of  the  trader.  The  combined  capital 
stock,  surplus,  reserves,  and  average  monthly  loans  for  companies 
examined  are  sho'wn  in  the  following  table : 

Table  21. — Combined  capital   stock,   surplus,   r-eserves,   and  average  monthly 
loans  for  exporters  and  fobbers,  1920  and  1921. 


Item. 


1920 


Capital  stock 

Surplus 

Reserves 

Total 

Average  monthly  loans 

Total 


$10,940,000.00 
20,523,661.34 
2, 428, 448. 86 


33, 892, 110. 20 
25,001,700.12 


58, 893, 810. 32 


$7,494,013.78 
16, 143, 126. 49 
1,763,407.54 


25,400,547.81 
27,303,086.67 


52. 703, 634. 48 


The  above  tabulation  includes  21  companies  for  1920  and  21  for 
1921.  None  of  these  firms  had  any  bonds  outstanding.  The  com- 
bined capital  stock,  surplus,  and  reserves  of  all  the  companies  ag- 
gregated about  $25,400,000,  or  about  50  per  cent  of  the  total  funds 
employed  in  1920,  and  increased  to  about  $33,900,000,  or  60  per  cent, 
in  1921.  The  balance  of  the  funds  employed  consisted  of  borrowed 
money  and  aggregated  about  50  per  cent  in  the  former  year  and  over 
40  per  cent  in  1921. 

Monthly  fluctuation  of  loans. — There  was  a  wide  fluctuation  in 
the  amount  of  short-time  loans  outstanding  for  different  months  of 
the  year.  These  fluctuations  for  the  entire  grain  trade  vary  directly 
with  the  price  of  the  grain  and  the  volume  of  business  transacted; 
hence,  the  largest  and  smallest  amounts  appear  in  one  month  for 
one  year  and  in  another  month  for  another  year.  The  fluctuations 
from  month  to  month  for  15  firms  from  which  reports  were  obtained, 
together  with  the  index  numbers,  are  shown  in  the  following  table : 


INVESTMEJ^T  AND  EARNINGS. 


69 


Table  22. — Monthly  fluctuation  in  amount  of  bills  payable  for  15  grain  exportimj 
companies,  July,  1920,  to  June,  1921. 


Date. 


1920 

July 

August 

September 

October 

November 

December 


Amount. 


$22,442,458 
20,914,224 
18,052,064 
20,928,193 
19,580,400 
17,798,057 


Index 
number. 


Date. 


1921 
100.0     Januan- 

93. 2  1  February 

80.4      March 

93.3  April 

87.2  '\  May 

79.3  June 


Amount. 


$10,552,681 
9,107,476 
5,141,906 
4,980,173 
4,376,224 
4,647,648 


index 
number. 


47.0 
40.6 
22.9 
22.2 
19.5 
20.7 


The  exhibit  uses  the  fiscal  year  July,  1920,  to  June,  1921,  as  an 
illustration  of  the  seasonal  variation  in  the  investment  required  for 
the  operation  of  a  grain  export  business.  These  loans  are  secured 
b}'  the  bills  of  lading  attached  to  the  sight  drafts,  and  the  purchaser 
of  the  grain  must  pay  the  draft  on  presentation  before  he  can  obtain 
possession  of  the  cargo  of  grain  represented  by  the  said  bills  of  lad- 
ing. The  series  of  index  numbers  is  based  on  the  loans  for  July, 
1920,  -^hich  is  represented  by  100  and  affords  a  convenient  basis  for 
comparative  purposes.  It  is  noted  that  the  amount  of  loans  was 
highest  during  July,  1920,  when  it  aggregated  about  $22,500,000. 
These  loans  declined  about  7  per  cent  during  August  and  this  con- 
traction continued  during  September.  In  October  the  amount  of 
loans  outstanding  returned  to  the  level  of  August  followed  by  a 
continuous  decline  until  the  minimum  amount  of  loans  was  reached 
during  May.  The  month  of  June  was  marked  by  a  slight  increase, 
which  indicates  that  the  cycle  of  grain  movements  for  a  new  crop 
year  had  begun.  The  minimum  loan  requirements  in  May  were 
about  80  per  cent  lower  than  the  maximum  month  of  July  of  the 
preceding  year. 

Section  7.  Earnings  for  exporters  and  fobbers. 

Total  earnings. — The  method  of  presenting  the  earnings  for  the 
companies  from  whose  records  complete  information  could  be  secured 
was  outlined  in  a  preceding  section.  (See  p.  66.)  The  following 
table  presents  a  recapitulation  of  the  earnings  for  grain  exporters 
and  fobbers  for  their  business  years  ending  in  1920  and  1921. 

Table  23. — Earnings  for  grain  exporters  and  fobbers,  1920  and  1921. 


Item. 

Exporters. 

Fobbers. 

1920 

1921 

1920 

1921 

$213,344,105 
208, 390, 522 

$450,363,702 
448, 200, 025 

$180,623,066 
176,172,062 

$247,920,674 
242, 129, 0,59 

Cost  of  sales    

4,953,583 
1,083,572 

2,163,677 
1,985,650 

4,451,004 
1,147,459 

5,791,615 

1,119,779 

Net  trading  profit 

3,870,011 
469,899 

178,027 
4,939,041 

3,303,545 
427,989 

4,371,836 

881  212 

Total  profit  on  grain 

4,339,910 
2,064,299 

5,117,068 
943,440 

3,731,534 
840,274 

5, 253, 048 

other  income 

165, 632 

Net  income 

6, 404, 209 

6,060,508 
1,585,583 

4,571,808 
1, 089, 302 

5,418,680 

Deduct  interest  on  notes  payable 

914, 821 

Revised  income 

5,504,264 

4, 474, 925 

3,482,506 

4,503,859 

70 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


The  analysis  by  grains  included  in  this  consolidated  table  of  earn- 
in^rs  is  discussed  in  section  9.  (See  p.  75.)  In  1920  the  results 
of  operations  of  15  exporters  and  7  fobbers  are  shown  and  in  the 
succeecfing  year  18  exporters  and  8  fobbers.  As  already  stated,  the 
commission  has  considered  the  short-term  loans  as  part  of  the  total 
funds  employed  in  the  grain  business  and  the  amount  of  interest 
paid  on  the  borrowed  money  was  returned  to  income. 

Earnings  for  exporters. — The  15  grain  exporters  had  combined 
earnings  of  slightly  over  $5,504,000  in  1920,  and  when  the  interest 
paid  was  returned  to  income  the  total  earnings  exceeded  $6,404,000. 
The  combined  gain  on  futures  for  1920  was  $469,900.  In  1921  the 
earnings  for  18  grain  exporting  companies  amounted  to  over 
$4,475,000,  which  was  increased  to  $6,061,000  when  interest  was 
returned  to  income.  The  combined  profit  from  trading  in  futures 
was  about  $4,939,000  during  this  year. 

Earnings  for  fobbers. — Seven  grain  fobbers  had  combined  earn- 
ings of  nearly  $3,483,000  in  1920,  and  when  the  interest  paid  was 
returned  to  income  the  aggregate  earnings  were  $4,572,000.  The 
gain  on  future  trading  for  this  year  was  about  $428,000.  In  the 
next  year  eight  fobbers  had  earnings  aggregating  a  little  over 
$4,504,000,  which  amount  was  increased  to  nearly  $5,419,000  Avhen 
the  interest  revision  was  made.  The  combined  profit  on  futures  was 
about  $881,000. 

Section  8.  Rates  of  earnings  for  exporters  and  fobbers. 

The  investment  and  earnings  for  exporters  and  fobbers  in  the 
grain  business  for  the  years  1920  and  1921  haA^e  been  discussed  in 
the  preceding  sections.  In  this  section  the  rates  of  earnings  on  the 
combined  investment  are  presented.  In  1920  the  results  of  the 
operations  of  15  exporters  and  7  fobbers  are  shown  and  in  the  suc- 
ceeding year  18  exporters  and  8  fobbers.  A  segregation  has  also 
been  made  in  regard  to  future  trading,  and  the  rates  of  earnings 
have  been  computed  both  including  and  excluding  futures.  As  pre- 
viously indicated,  the  commission  has  treated  the  short-term  loans 
as  part  of  the  total  funds  employed  in  the  grain  business,  and  the 
amount  of  interest  paid  by  the  companies  has  been  returned  to  in- 
come. The  rates  of  earnings  for  grain  exporters  and  fobbers.  as 
shown  by  the  records  of  the  several  companies  on  the  stockholders' 
investment  and  also  for  the  total  funds  employed,  including  and 
excluding  futures,  for  the  years  1920  and  1921,  are  shown  in  the  fol- 
lowing table : 

Table  24. — Rates  of  earnings  for  grain  exporters  and  fohhers.  on  the  stock- 
holders'' iniestment  and  on  total  funds  employed  in  the  grain  l)usiness,  includ- 
ing and  excluding  features,  1920  and  1921. 


Item. 


Capital  stock, 

surplus,  and 

reserves. 


Stockholders'  investment. 


Earnings. 


Rate  of 
earnings. 


Exporters: 

1920— Including  profit  or  loss  on  futures. 

Excluding  profit  or  loss  on  futures 
1921 — Including  profit  or  loss  on  futures. 

Excluding  profit  or  loss  on  futures 


?9, 519, 529 
9, 519, 529 
14, 994, 758 
14,994,758 


$5,504,264 
5.034,365 
4;  474, 925 
i464,n6 


Percent. 
57.82 
52.88 
29.84 


INVESTMENT  AND   EARNINGS.  7.1 

Table  24.— Rates  of  earnings  for  grain  exporters  and  fobiers,  etc. — Continued. 


Stockholders'  investment. 

Item. 

Capital  stock, 

surplus,  and 

reserves. 

Earnings. 

Rate  of 
earnings. 

Fobbers: 

1920— Including  profit  or  loss  on  futures 

$9,094,816 
9,094,816 
11,706,037 
11,700,037 

$3,482,506 
3,054,517 
4,503,859 
3, 622, 647 

Per  cent. 
3H  29 

Excluding  profit  or  loss  on  futures 

33  59 

1921 — Including  profit  or  loss  on  futures 

38  47 

Excluding  profit  or  loss  on  futures 

30  95 

Total  funds  employed. 

Item. 

Capital  stock, 
surplus,  re- 
serves, and 
borrowed 
funds. 

Earnings. 

Rate  of 
earnings. 

Exporters: 

1920 — Including  profit  or  loss  on  futures 

$22,272,693 
22,272,693 
31,873,947 
31,873,947 

22,966,182 
22,966,182 
19,836,714 
19, 836, 714 

$6,404,209 
5,934,310 
6, 000,  508 
1,121,467 

4,571,808 
4, 143,  819 
5, 418, 680 
4, 537, 468 

Per  rent. 
28  75 

Excluding  profit  or  loss  on  futures 

26  64 

1921 — Including  profit  or  loss  on  futures 

19  01 

Excluding  profit  or  loss  on  futures 

3  52 

Fobbers: 

1920— Including  profit  or  loss  on  futures 

19  91 

Excluding  profit  or  loss  on  futures 

18  04 

1921 — Including  profit  or  loss  on  futures 

27  32 

Excluding  profit  or  loss  on  futures 

22  87 

1  Loss. 


Rates  or  earnings  for  exporters. — The  15  grain  exporters  ]iad 
combined  capital,  surplus,  and  reserves  of  about  $9,520,000  in  1920, 
while  the  earnings  aggregated  slightly  over  $5,504,000,  giving  an 
average  rate  of  earnings  of  about  58  per  cent.  When  the  borrowed 
money  was  added  to  investment  and  interest  included  in  the  earnings, 
the  totals  were  $22,273,000  and  $6,404,000,  respectively,  with  an  aver- 
age rate  of  earnings  of  nearly  29  per  cent.  The  combined  gain  on 
futures  for  the  year  was  $469,900,  and  when  this  item  was  excluded 
from  the  earnings  while  the  investment  remained  constant,  the  aver- 
age rate  of  earnings  declined  to  nearly  53  per  cent  and  27  per  cent, 
respectively.  In  1921  the  stockholders'  investments  for  18  companies 
were  included  and  the  total  increased  to  about  $15,000,000,  while  the 
earnings  aggregated  $4,475,000,  with  an  average  rate  of  earnings 
of  about  30  per  cent.  When  the  borrowed  money  was  included  for 
the  same  18  companies  the  total  was  about  $31,874,000.  The  com- 
bined income  before  deduction  of  interest  aggregated  nearly  $6,061,- 
000  and  the  average  rate  of  earnings  slightly  exceeded  19  per  cent. 
The  combined  profit  from  future  trading  aggregated  about  $4,939,- 
000^  and  when  this  amount  was  deducted  irom  the  earnings,  the  in- 
come from  the  merchandising  operations  showed  a  loss  of  about 
$464,000,  while  the  average  rate  of  loss  was  about  3  per  cent.  The 
results  for  the  total  funds  employed  showed  a  gain  of  $1,121,000,  or 
an  average  of  3.5  per  cent. 

Kates  of  earnings  for  fobbers. — The  seven  companies  had  a  com- 
bined investment  of  about  $9,095,000  in  1920,  computed  as  before, 
while  the  earnings  were  nearly  $3,483,000,  giving  an  average  rate  of 
earnings  of  over  38  per  cent  as  compared  with  58  per  cent  on  the 


72 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


stockholders'  investment  for  the  exporting  companies.  After  adding 
the  ])orrowed  money  the  total  was  increased  to  slightly  over  $22,- 
966,000,  and  the  earnings  l)efore  the  deduction  of  interest  aggregated 
about  $4,572,000,  while  the  average  rate  of  earnings  was  about  20 
per  cent.  When  the  gain  on  futures,  which  amounted  to  about 
$428,000,  was  deducted  from  the  stockholders'  earnings  and  total 
earnings,  respectively,  the  average  rates  of  earnings  declined  in  the 
former  case  to  about  34  per  cent  and  to  slightly  over  18  per  cent  in 
the  latter  case.  In  1921  the  results  for  eight  fobbers  are  presented, 
with  a  combined  stockholders'  investment  in  the  grain  business  of 
$11,706,000  and  earnings  aggregating  a  little  over  $4,.504,000,  giving 
an  average  rate  of  earnings  slightly  exceeding  38  per  cent. 

After  adding  the  borrowed  money  the  total  funds  employed  for  this 
year  were  about  $19,837,000,  while  the  earnings  before  the  deduction 
of  interest  were  increased  to  nearly  $5,419,000,  making  the  average 
rate  of  earnings  over  27  per  cent.  When  the  gain  on  futures,  aggre- 
gating over  $881,000,  was  deducted  from  the  previous  income  on  both 
sides,  the  average  rates  of  earnings  declined  to  about  31  per  cent 
on  the  stockholders'  investment  and  to  nearly  23  per  cent  on  the  total 
funds  employed. 

American  branches  of  foreign  houses. — In  addition  to  the  com- 
panies engaged  in  the  export  business,  already  discussed,  the  books 
and  records  of  five  concerns  were  examined  which  merely  acted  as 
agents  for  European  houses  and  which  were  financed  by  their  prin- 
cipals; consequently  no  satisfactory  investment  or  earnings  could 
be  obtained  from  their  books  and  records  in  the  United  States. 
These  branches  usually  did  business  on  a  commission  basis,  which 
was  merely  large  enough  to  cover  the  expenses  of  the  branch  offices. 
The  quantities  of  grain  exported  by  such  concerns,  with  the  average 
cost  of  sales,  are  shown  in  the  following  table : 


Table  25.- 


-Quantity  and  cost  of  grain  exported  by  five  American  branches  of 
foreign  companies,  1920  and  1921. 


1920 

1921 

Grain. 

Quantity. 

Cost  of 
sales  per 
bushel. 

Quantity. 

Cost  of 
sales  per 
bushel. 

Wlieat 

Bushels. 

40,497,540 

57,045 

5,882,717 

843,708 

1,488,919 

$2,834 

1.133 

1.991 

1.613 

.913 

Bushels. 
115,372,210 

22,013,921 
7,5.56,888 
4,569,751 
8,816,330 

$1,939 

Corn 

.744 

Rye 

1.841 

Barley 

.809 

Oats 

.475 

Total 

48,769,929 

2.651 

158,329,100 

1.654 

The  above  table  shows  a  marked  increase  in  the  quantity  exjDorted 
in  1921  as  compared  with  1920  for  all  grains.  This  increase  was 
to  be  expected,  as  for  part  of  1920  all  wheat  exporting  was  handled 
through  the  United  States  Grain  Corporation  and  foreign  govern- 
mental buying  agencies. 

Rates  of  earnings  for  exporters  by  companies. — There  was  a  very 
Avide  range  in  the  results  for  individual  companies  in  both  years.  As 
already  stated,  the  ratio  of  borrowed  money  to  total  investment  is 
large  in  the  export  grain  business,  consequently  the  return  on  the 
stockholders'  investment,  i.  e.,  capital  stock,  surplus,  and  reserves, 


INVESTMENT   AND   EAKNINGS. 


73 


usuall}^  shows  either  an  unusually  large  profit  or  a  large  loss,  and 
it  is  not  very  significant  because  the  amount  of  borrowed  money  is 
generally  so  large.  The  following  table  shows  the  return  on  the 
stockholders'  investment  and  on  the  total  money  employed  in  the 
business,  by  companies,  for  1920  and  1921 : 

Tarle  26. — Rates  of  earnings  of  grain  exporters,  by  companies,  1920  and  1921. 


Year  and  com- 

Return on 
stockholders' 
investment. 

Return  on 

total 

funds  employed. 

Year  and  com- 
pany number. 

Return  on 
stockholders' 
investment. 

Return  on 

total 

funds  employed. 

pany  number. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

1921. 
1 

Per 

cent. 

23.9 

23.7 

64.3 

44.1 

10.4 

37.3 

6.3 

.5 

30.9 

6.7 

9.1 

5S.4 

1.8 

103.  7 

9.7 

16.6 

120.3 

641.2 

Per 

cent. 

15.9 

17.5 

94.2 

154.5 

122.2 

154.7 

1.8 

129.4 

129.0 

3.0 

6.0 

42.7 

128.9 

102.4 

14.6 

17.3 

151.8 

410.4 

Per 

cent 

lti.9 

18.4 

22.9 

41.4 

15.6 

18.9 

6.4 

4.3 

39.0 

8.0 

8.9 

21.5 

8.2 

55.6 

8.7 

1.3 

119.3 

23.4 

Per 

cent. 
11.4 
14.2 
30.8 

150.1 
12.2 

111.6 

.3 

15.7 

129.3 
5.6 
6.8 
17.7 
14.8 
55.0 
12.8 
1  . 7 

149!  3 
17.1 

1920. 
1 

Per 

cent. 

26.1 

.35.6 

193.6 

447.9 

33.0 

17.3 

51.4 

55.8 

5.9 

5.4 

57.5 

166.1 

21.2 

123.6 

280.8 

Per 

cent. 

22.3 

43.7 

174.1 

475.5 

17.7 

17.2 

77.3 

10.6 

6.7 

4.7 

152.6 

217.4 

12.8 

138.1 

172.1 

Per 

cent. 
25.1 
23.1 
28.9 

103.1 
17.1 
16.8 
IS.O 
40.2 
4.9 
0.7 
13.3 
36.5 
14.9 
33.8 

101.7 

Per 
cent. 
21.6 

2 

2 

27.7 

3 

3 

26.4 

4 

4 

109.0 

5 

2.4 

6...            ... 

6 

16.6 

7 

25.7 

8 

8 

7.6 

9 

9 

5.3 

10 

10 

5.0 

11 

11 

25.1 

12 

12 

44.7 

13 

13 

10.5 

14 

14 

37.4 

15 

15 

64.3 

Average 

17 

57.8  1      52.9 

28.8 

26.6 

18 

Average 

29.8 

13.1 

19.0 

3.5 

I  Loss 

The  3'ear  1920  was  a  very  profitable  one  for  grain  exporters,  all  of 
the  companies  showing  a  profit  on  the  stockholders'  investment  when 
trading  in  futures  was  included.  The  rate  of  return  for  indi- 
vidual companies  ranged  from  a  profit  of  over  5  per  cent  to  a  profit 
of  nearly  448  pev  cent.  There  were  5  companies  that  earned  in 
excess  of  100  per  cent  on  their  stockholder  investment  and  3  others 
earned  in  excess  of  50  per  cent,  while  only  2  made  less  than  10  per 
cent.  As  already  shown,  the  average  for  the  15  companies  was 
slightly  less  than  58  per  cent.  The  average  for  all  companies  was 
much  lower  than  would  appear  from  the  above  table  because  the 
companies  whose  stockholders  had  the  largest  investment  made  the 
smaller  profits,  for  example,  the  stockholders  of  the  company  making 
only  a  little  over  5  per  cent  had  over  one-third  of  the  total  stock- 
holders' investment.  The  results  excluding  losses  and  gains  on 
futures  differed  considerably  from  the  combined  earnings.  The  ex- 
treme range  was  from  a  loss  of  almost  8  per  cent  to  a  profit  of 
about  475  per  cent.  Six  companies  show  returns  of  over  100  per  cent, 
1  other  in  excess  of  50  per  cent,  and  2  less  than  10  per  cent,  while  tlie 
average  for  the  15  companies  was  almost  53  per  cent. 

The  return  on  the  stockholders'  investment  in  1921  was  much 
smaller  than  for  1920.  Two  companies  showed  a  loss  on  their  opera- 
tions, including  hedges.  The  range  was  from  a  loss  of  about  20  per 
cent  to  a  profit  of  over  641  per  cent.  Two  companies  made  in  excess 
of  100  per  cent,  two  others  over  50  per  cent,  and  eiglit,  including 


74 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


I 


those  showing  a  loss,  earned  less  than  10  per  cent.  The  average  for 
all  companies  was  about  30  per  cent.  When  futures  were  excluflerl 
10  of  the  18  companies  showed  a  loss  on  the  stockholders'  invest- 
ment. Four  companies  showed  large  returns,  while  four  showed 
small  profits.  The  results  for  all  companies  combined  show  an 
average  loss  of  a  little  over  3  per  cent. 

The  results  for  1920  on  the  total  funds  employed  in  the  grain  busi- 
ness show  profits  for  each  company,  both  including  and  excluding 
transactions  in  futures.  The  range,  including  operations  in  futures, 
was  from  about  5  per  cent  to  103  per  cent.  Two  companies  earned 
in  excess  of  100  per  cent  and  the  same  number  less  than  10  per  cent. 
The  average  was  almost  29  per  cent.  The  results  for  individual 
companies  were  frexjuently  quite  different  when  the  profit  or  loss 
from  transactions  in  futures  were  excluded.  The  range  of  profit 
Avas  from  somewhat  more  than  2  per  cent  to  109  per  cent.  One 
company  showed  results  in  excess  of  100  per  cent  and  another  com- 
pany about  64  per  cent,  while  4  companies  shewed  earnings  of  less 
than  10  per  cent.  The  average  for  all  companies  was  about  27  per 
cent. 

In  1921  two  companies  showed  a  loss  when  futures  were  included 
on  the  total  funds  employed  in  the  business.  The  same  companies 
showed  a  loss  on  the  basis  of  the  stockholders'  investment.  The 
range  of  return  on  the  total  funds  employed  was  from  a  loss  of  over 
19  per  cent  to  a  gain  of  about  56  per  cent.  Eight  companies,  includ- 
ing those  having  a  loss,  earned  less  than  10  per  cent.  The  average 
for  all  companies  was  19  per  cent.  When  the  profit  or  loss  on  futures 
was  excluded,  nine  companies  showed  a  loss,  and  the  range  was  from 
a  loss  of  50  per  cent  to  a  profit  of  about  55  per  cent.  The  average 
for  all  companies  was  a  profit  of  only  about  3^  per  cent. 

Rates  of  earnings  for  fobbers  by  companies. — There  were  seven 
companies  in  1920  and  eight  in  1921  whose  principal  business  was 
selling  grain  to  exporters.  The  exporting  business  was  more  profit- 
able than  the  fobbing  business  in  1920  while  the  opposite  was  the 
case  in  1921.  There  was  a  wide  range  in  the  rate  of  return  for 
fobbers  for  both  years.  The  following  table  shows  the  rate  of  return 
for  fobbers  on  the  stockholders'  investment  and  on  the  total  funds 
employed  in  the  grain  business  for  1920  and  1921 : 

Table  27. — Rates  of  earnings  of  grain  fobbers,  by  companies,  1,920  arid  1921. 


Year  and  com- 

Return on 
stockholders' 
investment. 

Return  on 

total 
investment . 

Year  and  com- 
pany number. 

Return  on 
stockholders' 
investment. 

Return  on 

total 
investment. 

pany  number. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

Includ- 
ing fu- 
tures. 

Exclud- 
ing fu- 
tures. 

1921. 
1 

Per 

cent. 
34.8 
30.4 
33.2 
74.8 
27.1 
38.4 
285.7 
>23.8 

Per 

cent. 

34.0 

22.7 
154.3 

65.9 
125.3 

49.4 
260.0 

13.4 

Per 
cent. 
28.8 
17.9 
35.8 
54.0 
14.4 
28.4 
38.9 
17.2 

Per 
cent. 
28.2 
14.6 
>19.9 
48.0 
15.3 
33.0 
36.2 
17.9 

1920. 
1 

Per 

cent. 
26.3 
65.0 

131.0 
91.0 
48.9 

120.2 

Per 

cent. 
22.3 
66.3 

129.1 

95.2 

56.4 

1  1.34.  3 

Per 

cent. 
16.5 
30.1 
19.4 
25.0 
15.1 
'6.1 

Per 
cent. 
14.6 

2.                       ..   . 

2 

30.6 

3 

3 

18.5 

4.            

4 

25.9 

5 

5 

16.6 

6 

6 

173.1 

Average 

8 

38.3 

33.6 

19.9 

18.0 

Average 

38.5 

31.0 

27.3 

22.9 

■Loss. 


INVESTMENT   AND  EARNINGS.  75 

An  examination  was  made  of  the  records  of  6  important  fobbers 
for  1920  and  8  for  1921.  The  individual  results  for  one  company  hav- 
ing: a  small  investment  were  omitted  from  the  above  table  for  1920 
because  they  would  be  misleading. 

In  1920  the  range  of  return  on  the  stockholders'  investment  was 
from  a  loss  of  31  per  cent  to  a  profit  of  91  per  cent.  Two  com- 
panies showed  a  loss  and  two  a  profit  in  excess  of  50  per  cent. 
While  the  individual  profits  were  large  they  were  not  as  large  as 
for  exporters.  The  average  for  all  companies  was  a  little  over  38 
per  cent.  When  the  gains  and  losses  from  future  trading  were  ex- 
cluded the  range  was  from  a  loss  of  134  per  cent  to  a  profit  of  95 
per  cent.  Two  companies  showed  a  loss  and  three  a  profit  of  over 
50  per  cent,  while  the  average  was  almost  34  per  cent. 

The  fobbing  business  was  more  profitable  than  the  exporting  busi- 
ness in  1921.  Only  one  company  showed  a  loss  on  the  stockholders' 
investment  when  the  profits  and  losses  on  operations  in  futures  were 
included.  The  range  for  individual  companies  was  from  a  loss  of  24 
per  cent  to  a  profit  of  286  per  cent.  All  of  the  companies  showing 
a  profit  made  in  excess  of  27  per  cent  and  the  average  for  all  com- 
panies was  a  little  over  38  per  cent.  ^Vhen  the  profits  and  losses 
from  future  trading  were  eliminated,  two  companies  showed  a  loss, 
two  increased  earnings,  and  the  profits  for  other  companies  were 
smaller  than  the  earnings,  including  the  results  from  transactions  in 
futures.  The  average  for  all  companies  Avas  about  31  per  cent.  The 
average  for  all  companies,  excluding  the  losses  and  gains  from  future 
trading,  was  34  per  cent  for  1920  as  compared  with  nearly  31  per 
cent  in  1921. 

The  rate  of  return  on  the  total  funds  employed  in  the  grain  busi- 
ness was  larger  for  most  companies  in  1921  than  in  1920.  One  com- 
pany showed  a  loss  on  the  combined  results  in  1921.  The  range, 
including  the  loss  or  gain  on  futures,  was  from  a  loss  of  about  7  per 
cent  to  a  gain  of  54  per  cent,  with  an  average  of  a  little  over  27 
per  cent.  The  results,  excluding  future  gains  and  losses,  were  some- 
what lower.  Two  companies  showed  a  loss  and  the  range  for  all 
companies  was  from  a  loss  of  about  20  per  cent  to  a  profit  of  almost 
48  per  cent,  with  an  average  of  almost  23  per  cent. 

In  1920  two  of  the  six  companies  showed  a  loss,  including  the  loss 
or  gain  on  futures,  and  the  remaining  four  substantial  or  large 
profits.  The  range  was  from  a  loss  of  somewhat  more  than  9  per 
cent  to  a  profit  of  about  30  per  cent,  with  an  average  of  almost  20 
per  cent.  When  the  profits  and  losses  on  futures  were  excluded  the 
results  for  all  but  one  company  were  only  slightly  changed  and  the 
average  was  18  per  cent. 

Section  9.  Earnings  from  the  export  grain  business. 

Total,  earnings  by  grains. — As  already  explained  (see  p.  67),  the 
Commission  has  allocated  general  and  other  expenses  not  charged 
directly  by  the  companies  to  the  different  grains  on  the  basis  of  the 
quantities  sold.  The  earnings  by  grains  are  presented  separately  for 
companies  engaged  principally  in  exporting  and  for  concerns  whose 
business  was  largely  fobbing.  The  results  for  1921  include  a  much 
larger  volume  of  business  than  those  for  1920.  This  was  due  to  the 
fact  that  the  United  States  Grain   Corporation    (see  Cliap.   VII) 


76 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


handled  the  bulk  of  the  wheat  sold  for  export  and  that  foreign  gov- 
ernmental agencies  exported  the  grain  prior  to  June  30, 1920. 

Wheat  exceeded  all  other  grains  both  in  volume  and  value  of  sales, 
the  quantity  being  practically  73  per  cent  of  the  total  and  the  value 
80  per  cent  of  the  total  in  1920,  Rye  was  second  both  in  volume  and 
value,  the  quantity  and  value  each  being  approximately  15  per  cent 
of  the  total ;  while  oats  was  third,  with  5  per  cent  of  the  total  quan- 
tity and  3  per  cent  of  the  total  value.  These  three  grains  supplied  91 
per  cent  of  the  total  quantity  and  94  per  cent  of  the  value  in  1920. 
In  1921  about  63  per  cent  of  the  total  quantity  of  all  grains  consisted 
of  wheat,  with  a  value  of  over  75  per  cent  of  the  total.  Corn  was 
second  in  quantity  and  value,  with  25  per  cent  of  the  quantity  and 
14  per  cent  of  the  value.  Rye  was  third  in  quantity  and  value,  with 
not  quite  6  per  cent  of  the  total  quantity  and  slightly  more  than  6 
per  cent  of  the  value.  These  three  grains  furnished  94  per  cent  of 
the  total  quantity  of  all  grains  exported  and  96  per  cent  of  the  value. 
(See  p.  14.) 

Total  earnings  for  exporters. — The  following  table  shows  by 
grains,  the  quantity,  the  net  sales  value,  the  cost  of  sales,  general  ex- 
pense, the  net  trading  profit  excluding  futures,  the  profit  or  loss  from 
transactions  in  futures,  and  the  net  profit  including  futures  for  com- 
panies engaged  almost  entirely  in  exporting  grain. 

Table  28. — Earnings  for  grain  exporters  as  computed  by  the  conwvission,  by 

grains,  1920  and  1921. 


EARNINGS  FOR  1920. 


Item. 

Wheat. 

Rye. 

Oats. 

Barley. 

Bushels  sold 

41,881,000 

35,929,417 

14, 319, 552 

5,398,754 

Net  sales 

$114,076,956.03 
110,326,474.82 

$73, 705, 734.  81 
72, 374, 564. 00 

$12,812,598.88 
13, 078, 560. 07 

$8,017,884.55 
7, 959, 028. 53 

Cost  of  sales 

Gross  trading  profit 

General  expense 

3, 750, 481. 21 
431, 846.  29 

1,331,170.81 
367, 968. 06 

1  265, 961. 19 
140,  883. 96 

58, 856. 02 
98, 310.  87 

Net  trading  profit 

Futures 

3,318,634.92 
1  72, 264.  40 

963, 204.  75 
503,217.55 

1  406, 845. 15 
72, 686. 67 

1  39, 454.  85 
49, 467. 15 

Total  profit 

3,246,370.52 

1,466,422.30 

1  334, 158. 48 

10, 012. 30 

Item. 

Com. 

Other  grains. 

Total  grain 
income. 

Bushels  sold 

3, 198, 293 

234.365 

100,961,381 

Net  sales 

$4,347,637.11 
4,267,064.80 

$383, 293.  89 
384, 829. 17 

$213, 344, 105. 27 

Cost  of  sales 

208, 390, 521. 39 

80, 572. 31 
43,164.41 

I  1, 53.5. 28 
1,400.42 

4, 953, 583. 88 

General  expense    

1, 083, 572. 01 

Net  trading  profit 

37, 407. 90 
1  83, 466. 35 

12,935.70 
257.84 

3,870,011.87 

469, 898. 46 

Total  profit 

146,058.45 

12,677.86 

4,339,910.33 

INVESTMENT  AND  EARNINGS. 


77 


Table  28. — Earnings  for  grain  exporters  as  computed  b|/  the  commission,  ly 
grains,  1920  and  1921 — Continued. 


EARNINGS  FOR  1921. 


Item. 

Wheat. 

Rye. 

Oats. 

Barley. 

Bushels  sold   

174,058,292 

29,568,647 

6, 05S,  887 

5,243,035 

$349,596,416.11 
347,618,847.08 

$56,234,82.5.78 
55,  823, 490.  20 

$4, 150, 216. 92 
4,066,511.02 

$4,511,283.12 

Cost  of  sales 

4,447,035.73 

Gross  trading  profit 

1,  777, 569. 03 
1,354,776.69 

411,335.58 
231,494.71 

83, 705.  90 
42, 970.  67 

64, 247. 39 
61,896.25 

Net  trading  profit 

422, 792. 34 
4, 163, 012. 09 

179, 840.  87 
1 13, 375. 66 

40,  V:?5. 23 
126,422.73 

2,351.14 
48,574.31 

Total  profit 

4, 585,  804. 43 

166,  465.  21 

167, 157. 96 

50,925.45 

Item. 

Corn. 

Other  grains. 

Total  grain 
income. 

43,612,985 

576, 987 

259,118,863 

$34,  890, 356. 02 
35, 152, 658. 22 

$980, 603.  82 
891, 482.  75 

$450,363,701.77 

Cost  of  sales '. 

448,200,025.00 

Gross  trading  profit 

1262,302.20 
290, 893. 96 

89, 121. 07 
3,617.82 

2,163,676.77 

1,985,650.10 

1  5.53, 196. 16 
612,817.02 

85,  .503. 25 
1, 590.  42 

178,026.67 

Futures 

4,939,040.91 

Total  profit 

59,020.86 

87, 093. 67 

5,117,067.58 

>  Loss. 

As  already  stated,  the  commission  has  considered  notes  payable  as 
part  of  the  money  used  in  the  grain  business  and  has  included  in 
the  total  profit  the  interest  paid  on  borrowed  money.  The  method 
of  allocating  general  administrative  and  other  expenses  to  the  differ- 
ent grains  has  already  been  explained.  (See  p.  67.)  Other  grains  in- 
clude buckwheat,  flax,  milo,  and  kaffir  corn.  The  net  trading  profit 
shows  the  actual  results  of  the  merchandising  operations  and  does 
not  include  the  loss  or  gain  from  transactions  in  futures  which  are 
shown  under  futures. 

In  addition  to  the  profit  or  loss  on  merchandising  operations  in 
grain  there  were  various  other  items  of  income,  as  income  from  out- 
side investments  and  commissions  on  business  done  for  others,  which 
were  not  derived  from  the  grain  business  and  were  not  allocated  to 
specific  grains.  There  were  also  various  items  of  expense  which 
could  not  be  allocated  to  specific  grains.  The  net  income  for  the 
company  is  obtained  by  adding  this  other  income  and  deducting  these 
items  of  expense  from  the  total  profit  for  all  grains  combined. 

In  1920  there  was  a  loss  in  the  merchandising  operations  for  oats, 
barley,  and  other  grains,  and  from  future  transactions  in  wheat  and 
corn.  There  was  a  net  trading  profit  for  wheat,  rye,  and  corn  and  a 
gain  from  future  trading  for  rye,  oats,  and  barley.  The  combined 
net  earnings  from  the  merchandising  transactions  for  all  grains 
amounted  to  a  little  over  $3,870,000  in  1920,  the  net  gain  from  futures 
was  nearly  $470,000,  and  the  total  profit  including  futures  was  almost 
$4,340,000. 


78 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


In  1921  the  volume  of  sales  of  wheat,  corn,  and  all  grains  was  much 
large)'  than  in  1920.  Corn  was  the  only  grain  showing  a  loss  for  net 
trading  operations  and  rye  the  only  grain  showing  a  hjss  for  trans- 
actions in  futures.  The  merchandising  profits  were  small  for  all 
grains,  while  the  gains  from  futui'es  were  large  for  all  grains  except 
rye.  There  was  a  total  profit  for  each  gi^ain,  but  the  earnings  were 
much  smaller,  when  the  volume  of  the  sales  are  considered,  than  for 
the  preceding  year. 

Total  earnings  for  fobbers. — The  following  table  shows  by 
grains,  the  quantity,  the  net  sales  value,  the  cost  of  sales,  general  ex- 
pense, the  net  trading  profit  excluding  futures,  the  profit  or  loss  from 
transactions  in  futures,  and  the  net  profit  including  futures,  for  com- 
panies engaged  largely  or  entirely  in  fobbing  grain: 


Table  29. 


-Earnings   for  grain   fobhers   a-s   computed    by   the   commission,   hy 
grains,  1920  and  1921. 


EARNINGS  FOR  1920. 


Item. 


Bushels  sold . 


Net  sales 

Cost  of  sales. 


Gross  trading  profit . 
General  expense 


Net  trading  profit. 
Futures 


Total  profit. 


Wheat. 


67, 340, 371 


$160, 046, 319. 07 
155,  .W4, 202. 94 


4,.502, 116. 13 
909, 543.  83 


3,592,572.30 
50, 452. 81 


3,643,025.11 


Rye. 


1,092,873 


$2,027,936.66 
1,886,275.19 


141,661.4,7 
15,733.11 


125,928.36 
5,978.05 


131,906.41 


Oats. 


9,067,181 


$7,895,906.53 
7,923,882.32 


>  27, 975. 79 
128,571.91 


1  156, 547. 70 
244, 819. 00 


Barley. 


$1,151,800.53 
1,120,172.26 


31,628.27 
9,050.90 


22,  .577. 37 
11,042.80 


21,. '34. 57 


Item. 


Bushels  sold. 


Net  sales 

Cost  of  sales . 


Gross  trading  profit. 
General  expense 


Net  trading  profit . 
Futures 


Total  profit. 


Corn. 


5,986,327 


Other  grains. 


357,016 


$8,952,8.53.27 
9,169,966.20 


1  217, 132. 93 
79,568.53 


1296,701.46 
127,781.05 


1  168,920.41 


$548,249.92 
527,542.39 


20, 707. 53 
4,990.86 


15, 716. 67 


15,716.67 


Total  grain 
income. 


84,582,305 


$180,623,065.98 
176,172,061.30 


4,451,004.68 
1,147,459.14- 


3,303,54.5.54 
427,988.11 


3,731,533.65 


EARNINGS  FOR  1921. 


Item. 

Wheat. 

Rye. 

Oats. 

Barley. 

103,651,619 

1,099,237 

14,105,699 

394,669 

.S222, 149, 277.  89 
216, 160, 816. 25 

$2,082,544.79 
1,783,9.58.95 

$8,024,423.96 
8,391,144.74 

$374,206.10 

407,326.50 

Gross  trading  profit 

.5,988,461.64 
1,088,607.29 

298, 58.5.  84 
10, 585. 38 

1366,720.78 
131.448.32 

133,120.40 
5,914.70 

Net  trading  profit 

Futures 

4, 899, 8.54. 35 
264,599.54 

288,000.46 
111,239.99 

I  498, 169. 10 
285, 100.  87 

139,035.10 
1,898.76 

Total  profit 

5,164,453.89 

276,760.47 

1213,068.23  1              137.136.34 

IT^VESTMENT  AND   EARNINGS. 


79 


Table  29. — Earnings   for  grain   fobher.t   as   computed   by  the   commission,   by 
grains,  1920  and  1921 — Continued. 

EARNINGS  FOR    1921— Continued. 


Item. 

Com. 

Other  grains. 

Total  grain 
income. 

18,162,303 

327,360 

137,740,887 

$14,920,231.66 
14,981,126.79 

$369,989.27 
404,685.85 

$247,920,673.67 

Cost  of  sales 

242,129,0.59.08 

1  60, 895. 13 
177,9-39.81 

134,696.58 
5, 263. 74 

5,791,614.59 

General  expense 

1,419,779.24 

1238,854.94 
340,853.67 

139,960.32 

4,371,835.35 

881,212.8.5 

Total  profit 

101,998.73 

139,%0,32 

5,253,048.20 

I  Loss. 


In  1920  the  cost  of  sales  was  greater  than  the  sales  realization  for 
oats  and  corn,  consequently  a  loss  is  shown  for  the  net  trading  profit. 
In  the  case  of  oats  the  gains  from  future  trading  exceeded  the  net 
trading  loss,  hence  a  profit  is  shown  where  futures  are  included.  In 
1921  the  net  trading  profits  were  large  for  wheat  and  rye  and  mod- 
erate for  corn  and  other  grains,  while  losses  were  shown  for  oats  and 
barley.  A  profit  was  shown  for  transactions  in  futures  for  each 
grain  excepting  rye.  AVhen  gains  and  losses  on  futures  were  included 
a  profit  was  shown  for  corn. 

In  1921  the  volume  of  sales  of  wheat,  oats,  corn,  and  for  all  grains 
was  much  larger  than  in  1920.  The  merchandising  profits  on  all 
grains  were  somewhat  larger  in  1921  than  in  1920,  but  they  did  not 
increase  in  the  same  proportion  as  the  volume  of  sales;  thus  the  in- 
crease in  quantity  of  all  grains  sold  was  62  per  cent  and  that  for  the 
total  profits  32  per  cent.  When  the  profits  and  losses  from  future 
transactions  were  included  the  total  profit  for  1921  was  40  per  cent 
larger  than  1920. 

Section  10.  Net  profit  per  bushel  by  gn^ains. 

Net  profit  on  wheat  for  exporters. — As  already  stated,  the  Com- 
mission distributed  general,  administrative,  and  other  expenses  not 
charged  directly  to  the  diffeient  grains  bj^  the  companies.  (See  p. 
67.)  In  this  section  the  net  profit  per  bushel  for  the  principal 
grains  exported  or  sold  f.  o.  b.  vessel  for  export  is  presented.  This 
information  is  shown  separately  by  companies,  which  are  designated 
by  numbers  in  order  not  to  disclose  their  identity.  The  following 
table  shows  the  net  sales  realization,  the  cost  of  sales,  the  gross  trad- 
ing profit,  general  expenses,  and  net  trading  profit,  the  profit  or  loss 
on  futures,  and  the  net  profit  or  loss  including  futures  of  exporters^ 
for  1920  and  1921 : 


80 


METHODS  AND   OPERATIONS   OF   EXPORTERS. 


Table  30. — Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  wheat 
exported,  by  companies,  1920  and  1921. 


Year  and  com- 
pany. 

Not  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1921. 
1 

$2. 576 
1.384 
2.385 
1.52 
2.435 
1.922 
1.72 
2.715 
1.461 
2.09 
2. 528 
1.542 
1.586 
2.378 
1.468 
2.61 
1.563 
2.008 

$2. 608 
1.354 
2.35 
1.59 
2.417 
1.946 
1.714 
2.715 
1..508 
2.072 
2.512 
1.862 
1.582 
2.329 
1.469 
2.644 
1.60 
1.973 

$0,068 
.03 
.035 

>.07 
.018 

J.  024 
.006 

$0. 018 
.012 
.004 
.006 
.011 
.006 
.004 
.005  , 
.009 
.025 
.01 
.003 
.005 
.009 
.007 
.038 
.023 
.007 

$0.05 

.018 

.031 
1.076 

.007 
1.03 

.002 
1.005 
1.056 
1.007 

.006 
1.323 
1.001 

.04 
1.008 
1.072 
1.06 

.028 

$0,007 
.004 

1.01 
.094 
.024 
.064 
.009 
.011 
.123 
.002 
.015 
.004 
.003 

1.002 
.017 
.001 
.03 
.009 

$0,057 

2 

.022 

3 

.021 

4 

.018 

5 

.031 

6 

.034 

7 

.011 

8 

.006 

9 

1.047 
.018 
.016 
1.32 
.004 
.049 
1.001 
1.034 
1.037 
.035 

.067 

10 

1.005 

11 

.021 

12 

1.319 

13 

.002 

14 

.038 

15 

.009 

16 

1.071 

17 

1.03 

18 

.037 

Average 

2.009 

1.998 

.011 

.008 

.003 

.024 

.027 

1920. 
1 

3.03 

2.732 

2.691 

2.904 

2.842 

2.622 

2.624 

2.846 

2.298 

2.718 

2.826 

2.698 

2.592 

2.721 

2.96 

2.668 

2.446 

2.  .533 

2.845 

2.555 

2.578 

2.827 

2.268 

2.641 

2.753 

2.636 

2.519 

2.65 

.07 
.064 
.245 
.371 
1.003 
.067 
.046 
.019 
.03 
.077 
.073 
.062 
.073 
.071 

.085 

.021 

.007 

.015 

.004 

.01 

.009 

.01 

.02 

.009 

.009 

.008 

.03 

.019 

1.015 
.043 
.238 
.356 

1.007 
.057 
.037 
.009 
.01 
.068 
.064 
.054 
.043 
.052 

.017 
1.007 

.002 

2 

.036 

3 

.238 

4 

.356 

5 

.006 
i.COl 

.051 
1.003 

1.001 

6 

.056 

7 

.088 

8 

.006 

9 

.01 

10 

1.032 

1.01 

1.011 

.036 

11 

.054 

12 

.043 

13 

.043 

14...!.! 

.021 

.073 

Average 

2.724 

2.635 

.089 

.01 

.079 

1.002 

.077 

1  Loss. 


There  was  a  wide  variation  in  the  net  sales  realization  per  bushel 
for  different  companies.  In  1920  the  range  was  from  a  minimum  of 
$2.30  to  a  maximum  of  $3.03  and  in  1921  from  $1.38  to  $2.72  per 
bushel.  This  wide  difference  for  different  companies  was  largely 
due  to  the  period  of  the  year  in  which  a  particular  company  made  the 
bulk  of  its  sales.  Companies  making  a  large  proportion  of  their 
sales  early  in  1920,  for  example,  show  a  very  high  average,  while 
those  making  the  bulk  of  their  shipments  in  the  latter  part  of  the 
year  show  a  much  lower  average. 

There  was  a  very  wide  range  in  the  gross  trading  profit.  In  1920 
one  company  showed  a  slight  loss,  while  two  other  companies 
showed  very  large  margins,  amounting  to  $0.37  per  bushel  in  one 
case  and  to  almost  $0.25  per  bushel  in  the  other.  In  1921,  on  the 
other  hand,  7  out  of  18  companies  showed  a  loss,  one  showed  no 
gross  profit,  while  the  gross  profit  for  the  remaining  companies 
ranged  from  two-tenths  of  a  cent  to  almost  $0.07  per  bushel. 

The  net  trading  profit,  i.  e.,  the  net  profit  before  deducting  gains 
or  losses  on  futures,  w^as  generally  quite  large  in  1920.  Two  of  the 
14  exporters  showed  slight  losses  while  the  profit  of  the  remaining 
companies  ranged  from  almost  $0.01  to  nearly  $0.36  per  bushel  and 


INVESTMENT   AND   EARNINGS. 


81 


the  average  for  all  companies  was  almost  $0.08  per  bushel.  In  1921 
the  net  trading  profit  was  much  smaller.  Ten  out  of  18  companies 
showed  a  loss  ranging  from  one-tenth  of  a  cent  to  $0,323  per  bushel, 
while  the  remaining  concerns  showed  profits  per  bushel  ranging  from 
two-tenths  of  one  cent  to  $0.05  per  bushel.  The  average  for  all  com- 
panies was  three-tenths  of  a  cent  per  bushel. 

The  net  profit  per  bushel  including  future  gains  and  losses  was 
slightly  smaller  in  1920  than  the  net  trading  profit,  while  in  1921 
all  but  two  companies  showed  profits  from  their  transactions  in  fu- 
tures. In  1920  the  average  results  for  all  companies  was  a  small  loss 
on  futures  while  in  1921  the  average  profit  was  $0,024  per  bushel. 

Net  profit  on  wheat  for  fobbers. — The  companies  engaged  en- 
tirely or  principally  in  fobbing  show  considerably  lower  per  bushel 
averages  for  the  net  sales  realization  in  1920  than  was  the  case  for 
exporters;  while  in  the  following  year  the  average  for  fobbers  was 
higher.  The  following  table  shows  the  net  sales  realization,  the  cost 
of  sales,  the  gross  trading  profit,  general  expenses,  the  net  trading 
profit,  the  profit  on  futures,  and  the  net  trading  profit  including 
futures,  of  fobbers  for  1920  and  1921. 

Table  31. — Sales  realization,  cost  of  sales,  and  net  profit  pet   bushel  for  icheat 
fobbed,  by  companies,  1920  and  1921. 


Y 

ear  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1.. 

1921. 

$2.15 
2.29 
2.237 
2.193 
2.33S 
2.403 
1.501 

$2,085 
2.24 
2.273 
2.089 
2.308 
2.323 
1.471 

$0. 065 
.05 
1.036 
.104 
.03 
.08 
.03 

$0,009 
.012 
.018 
.01 
.011 
.023 
.009 

$0,056 
.038 
1. 054 
.094 
.019 
.057 
.021 

I  $0,004 
.003 
.072 
.001 
.009 
1.011 
.001 

$0,052 

2 

.041 

3 

.018 

4 

.095 

5 

.028 

6 

.046 

7 

.022 

Average 

1920. 

2.143 

2.085 

.058 

.011 

.047 

.003 

.05 

1 

2.373 

2.076 

2.64 

2.493 

2. 138 

2.89 

2.238 

2.296 
1.993 
2.661 
2.431 
2.095 
2.832 
2.252 

.077 
.0,83 
1.021 
.062 
.043 
.058 
1.014 

.015 
.014 
.024 
.01 

.ens 

.01 
.012 

.062 
.069 

1. 045 
.052 
.025 

1.048 
.026 

.062 

2 

.069 

3         

1.045 

4 

.052 

5       

.025 

6 

.004 
.067 

.052 

7..,- 

.041 

Average 

2.377 

2.311 

.066 

.013 

.053 

.001 

.054 

The  average  net  sales  realization  ranged  from  about  $2.08  per 
bushel  to  $2.89  per  bushel  in  1920,  with  an  average  for  the  seven 
companies  of  almost  $2.38  per  bushel.  In  1921  the  minimum  aver- 
age price  for  a  particular  company  was  $1.50  per  bushel  and  the 
maximum  about  $2.40,  while  the  average  for  the  seven  companies 
was  $2.14  per  bushel. 

Two  out  of  seven  companies  in  1920  and  one  company  in  1921 
showed  cost  of  sales  in  excess  of  the  net  sales  realization,  while  the 
gross  trading  profit  for  the  remaining  companies  ranged  from  a 
little  over  $0.04  per  bushel  to  somewhat  more  than  $0.08  per  bushel 
in  1920  and  from  $0.03  to  a  little  over  $0.10  per  bushel  in  1921. 


82 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


The  g:eneral  expenses  varied  considerably.  In  1920  the  smallest 
amount  was  $0.01  per  bushel  and  the  largest  $0,024,  while  in  1921, 
due  to  a  much  larger  volume  of  business,  the  range  was  from  a  mini- 
mum of  0.9  of  a  cent  to  $0,023  per  bushel. 

Two  companies  in  1920  and  one  in  1921  showed  a  net  trading  loss. 
For  the  remaining  concerns  the  net  trading  profit  ranged  from 
$0,025  per  bushel  to  a  maximum  of  $0,069  in  1920.  The  average 
for  the  seven  companies  was  somewhat  more  than  $0.05  in  1920  and 
not  quite  $0.05  per  bushel  in  1921,  The  range  for  individual  fob- 
bers  was  much  smaller  than  for  exporters. 

In  1920  only  two  companies  showed  profits  on  futures.  In  one 
case  this  profit  was  large,  almost  $0.07  per  bushel,  and  it  changed  the 
results  for  net  trading  from  a  loss  to  a  profit.  In  1921  two  com- 
panies showed  a  loss  on  futures  while  the  other  five  showed  net  gains 
on  future  transactions,  but  there  was  only  one  case  in  which  the  per 
bushel  profit  on  future  operations  was  substantial.  The  average  net 
profit,  including  futures,  for  all  seven  companies  was  slightly  higher 
than  the  net  trading  profit  in  both  years. 

Net  profit  on  rye  for  exporters, — Each  company  exporting  wheat 
also  exported  some  rye  in  both  1920  and  1921,  The  average  net 
sales  realization  for  all  companies  was  $2.05  per  bushel  in  1920  and 
$1.90  in  1921,  The  average  gross  trading  margin  was  3.7  cents  per 
bushel  in  1920  and  only  1.4  cents  per  bushel  in  1921,  The  net  trad- 
ing profit,  which  shows  the  results  exclusive  of  the  profits  or  losses 
from  futures,  was  2.7  cents  per  bushel  in  1920  and  only  0.6  of  a 
cent  per  bushel  in  1921,  In  1920  the  average  profit  per  bushel  for 
all  companies  was  increased  1.4  cents  per  bushel  when  futures  were 
included,  while  the  hedging  profits  and  losses  for  all  companies 
balanced  in  1921.  The  following  table  shows  for  rye  exports  the 
net  sales  realization,  the  cost  of  sales,  the  gross  trading  profit, 
the  general  expense,  the  net  trading  profit,  the  profit  or  loss  from 
futuTes,  and  the  total  net  profit  including  futures,  per  bushel,  by 
companies,  for  1920  and  1921 : 

Table  32. — Sales  realization,  cost  of  sales,  and  net  profit  per  hnshel  for  rye 
exported,  by  companies,  1920  and  1921. 


Y 

ear  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 

trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1. 

1921. 

$1,874 
1.129 
1.8.39 
1.405 
2.004 
2.092 
1.  .575 
2.243 
1,49 
1.762 
2.016 
1.452 
1.57 
1.661 
1.384 
1,887 
1,809 
1.62 

$1,913 
1.124 
1.896 
1.243 
2.044 
2.046 
1.594 
2.222 
1.549 
1.738 
2.00 
1.42 
1,561 
1,598 
1.35 
2,247 
1,75 
1,599 

1  $0,039 
.005 

I.  0.57 
.162 

1.04 
.046 

1.019 
.022 

1.0.59 
.024 
.016 
,032 
.009 
.063 
.034 

1.36 
.059 
.021 

$0,017 
.012 
.005 
.005 
.011 
.006 
.004 
.006 
.008 
.024 
.01 
,003 
.005 
,009 
,008 
.039 
.023 
,008 

1  $0.  0.56 
1.  007 
1.062 

.157 
1.051 

.04 
1.  023 

.016 
1.067 

$0,006 
.003 
.052 

1  $0. 05 

2 

1.004 

3 

1.01 

4     .                  

.157 

5 

1.005 
1.004 

1.003 
1.004 
.117 

1.056 

6 

.036 

7 

1.026 

8 

.012 

9 

.05 

10     .. 

11 

.006 
.029 
.004 
,054 
,026 
1.399 
.036 
,013 

1.112 
.006 
.001 

1.044 
.032 

1.087 
.019 
.018 

1,106 

12 

,035 

13 

.005 

14 

.01 

15 

.058 

16 

1,486 

17 

.055 

18 

.031 

Average  — 

1.902 

1.888 

.014 

.008 

.006 

.006 

INVESTMENT   AND   EARNINGS.  S3 

Table  32. — Sales  realisation,   co-ff   of  sales,  etc. — Continnecl. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 

futures. 

1.. 

1920. 

$2. 443 
1.906 
2.014 
1.99 
2.128 
2.089 
2.304 
2.465 
1.697 
2.198 
2.12 
2.11 
2.336 
2.223 

$2. 382 
1.931 
1.91 
1. 959 
2.094 
2.068 
2.379 
2.418 
1.6.57 
2.148 
2. 082 
2.081 
2.214 
2.188 

$0. 061 
1.025 
.104 
.031 
.034 
.021 
1.075 
.047 
.04 
.05 
.038 
.029 
.122 
.035 

$0. 021 
.007 
.015 
.007 
.004 
.01 
.009 
.011 
.02 
.009 
.009 
.009 
.029 
.018 

$0.04 
1.032 
.089 
.024 
.03 
.011 
1.084 
.036 
.02 
.041 
.029 
.02 
.093 
.017 

I  $n.  003 
.029 
.008 
.01 
1.007 
1.006 
.022 

$0,037 

2 

1.003 

3 

.097 

4 

.0.34 

5 

.023 

6 

.005 

7 

1.062 

8 

.036 

9 

.02 
1.019 
1.014 

.01 
1. 051 

.033 

.04 

10   

.022 

11 

.015 

12     

.06 

13 

.042 

14 

.05 

Average 

2.051 

2.014 

.037 

.01 

.027 

.014 

.041 

1  Loss. 

There  was  a  wide  varriation  in  the  net  sales  realization  on  rye  for 
individual  companies  in  both  years.  In  1920  the  minimum  sales  real- 
ization for  an  individual  company  was  about  $1.70  per  bushel  and  the 
maximum  almost  $2.47  per  bushel,  while  in  1921  the  lowest  net  sales 
realization  was  only  $1.13  and  the  highest  $2.24  per  bushel.  The  gross 
trading  profit  on  rye  ranged  from  a  loss  of  7.5  cents  per  bushel  to  :i 
profit  of  a  little  over  $0.12  in  1920,  and  from  a  loss  of  $0.36  to  a  profit 
of  a  little  over  $0.16  per  bushel  in  1921.  In  1920,  2  companies  out  of  14 
showed  a  loss  when  the  profit  or  loss  on  transactions  in  futures  were 
excluded,  while  in  1921  there  vi^ere  7  companies  which  showed  a  loss 
and  1  that  showed  no  profit  out  of  the  total  of  18  firms.  The  range 
for  individual  companies  was  from  a  loss  of  8.4  cents  to  a  profit  of 
9.3  cents  per  bushel  in  1920,  and  from  a  loss  of  nearly  $0.40  per 
bushel  to  a  profit  of  almost  $0.16  per  bushel  in  1921.  In  1920  the 
inclusion  of  gains  and  losses  from  futures  generally  increased  the 
margin  of  profit  or  reduced  the  per  bushel  loss  somewhat,  but,  as 
already  pointed  out,  in  1921  the  profits  and  losses  of  all  companies 
combined  were  not  changed  by  the  inclusion  of  such  gains  or  losses. 

Net  profit  on  rye  for  fobbers. — There  were  only  4  of  tlie  7  com- 
panies that  sold  wheat  f .  o.b.  vessel  for  export  in  1920  and  6  in  1921  that 
sold  any  rye  for  export.  The  average  sales  realization  for  fobbers  was 
considerably  lower  than  the  average  sales  realization  for  exporters  in 
1020  and  only  slightly  lower  in  1921.  In  1920  the  average  was  almost 
$1.86  per  bushel  for  fobbers  as  compared  with  $2.05  per  bu.shel  for 
exporters;  while  in  1921  the  difference  was  only  0.7  of  a  cent  per 
bushel,  the  average  for  both  fobbers  and  exporters  was  about 
$1.90  per  bushel.  The  average  gross  trading  profit  per  bushel  was 
slightly  more  than  $0.13  for  fobbers  in  1920  and  $0.27  in  1921.  Tlie 
average  net  trading  profit  was  likewise  large  in  both  years.  In 
1920  it  was  approximately  $0,12  per  bushel  while  in  1921  it  was 
slightly  more  than  $0.26  per  bushel.  The  profits  or  losses  on  futures 
did  not  materially  affect  the  results  in  either  year.  In  1920  the 
profits,  including  futures,  were  $0.12  per  bushel  and  in  1921  a  little 
over  $0.25  per  bushel. 
106205°— 22 8 


84 


METHODS   AND   OPEEATTONS   OF   EXPORTERS. 


The  followinn^  table  shows,  for  f()l)bers,  the  net  sales  realization, 
the  cost  of  sales,  the  gross  trading  profit,  the  general  expense,  the 
net  trading  profit,  the  profit  or  loss  on  futures,  and  the  total  net 
profit  including  futures,  per  bushel  on  rya  for  1920  and  1921: 

Table  33. — Sales  reaUzation,  cost  of  sales,  and  net  profit  per  bushel  for  rye 
fobbed,  by  companies,  1020  and  1921. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1921. 
1 

J1.913 
1.6i7 
1. 60.5 
1.665 
2.230 
1.606 

$1.  6C7 
1.  623 
1. 457 
1.  651 
2.127 
1.991 

$0. 306 
.024 
.148 
.014 
.103 
1 .  385 

$0,008 
.018 
.009 
.013 
.023 
.009 

JO.  208 
.006 
.139 
.001 
.080 

1.394 

1  $0,016 
.073 

$0  282 

2 

079 

3 

139 

4 

001 

080 

6 

'    394 

Average 

1.895 

1.623 

.272 

.010 

. 262  1           1  .  010 

.252 

1920. 
1 

1.844 
2.178 
1. 034 
1.930 

1.7C6 
2.102 
1.350 
1.846 

.138 

.076 

1.316 

.084 

.015 
.010 
.018 
.010 

.123 

.066 

1.334 

.074 

.005 

1.033 

.335 

128 

2 

033 

3 

.001 

4 

.074 

Average 

1.855 

1.726 

.129 

.014 

.115 

.005 

.120 

1  Loss. 


In  1920  the  minimum  sales  realization  for  an  individual  company 
was  $1.03  and  the  maximum  $2.18  per  bushel,  and  in  the  following 
year  the  range  was  from  $1.61  to  $2.23  per  bushel.  One  company 
in  each  year  show  .d  a  cost  of  sales  in  excess  of  its  sales  realization. 
In  1920  the  gross  trading  profit  ranged  from  a  loss  of  almost  $0.32 
per  bushel  to  a  profit  of  about  $0.14  per  bushel,  while  in  the  following 
year  the  range  was  from  a  loss  of  approximately  $0.39  to  a  profit 
of  nearly  $0.31  per  bushel.  The  net  trading  profit  showed  a  similar 
fluctuation  for  individual  companies  from  a  loss  of  about  $0.33  per 
bushel  to  a  profit  of  slightly  more  than  $0.12  per  bushel  in  1920,  and 
from  a  loss  of  a  little  over  $0.39  to  a  profit  of  almost  $0.30  per  bushel 
in  the  following  year.  One  company  showed  a  very  large  profit  on 
transactions  in  futures  in  1920,  amounting  to  over  $0.33  per  bushel, 
and  in  the  following  year  another;  company  showed  gains  on  futures 
of  over  $0.07  per  bushel.  For  all  companies  combined  there  was  a 
profit  of  only  0.5  of  a  cent  per  bushel  on  future  operations  in  1920 
and  a  lo"s  of  $0.01  per  bushel  during  the  next  year. 

Net  profit  on  barley  for  exporters. — Eleven  out  of  the  18  com- 
panies exporting  wheat  in  1921  also  exported  barley,  while  for  1920 
12  of  th'?  14  companies  exporting  wheat  also  exported  barley.  The 
average  net  sales  realization  per  bushel  for  all  companies  was  $0.86 
in  1921  and  $1,485  in  1920,  but  the  average  gross  trading  profit  for 
all  companies  in  1921  Avas  1.2  cents  per  bushel  as  against  1.1  cents 
in  1920.  The  average  net  trading  profit  for  all  companies  in  1921 
was  0.1  of  a  cent  per  bushel  as  against  a  loss  of  0.7  of  a  cent  per 
bushel  in  1920.  For  both  years  the  average  profit  per  bushel  from 
futures  for  all  companies  amounted  to  0.9  of  a  cent,  giving  a  total 
net  profit  per  bushel  of  1  cent  in  1921  and  of  only  0.2  of  a  cent  per 
bushel  in  1920. 


INVESTMENT  AND   EARNINGS. 


85 


The  following?  table  shows  for  exporters  of  barley  the  net  sales 
realization,  the  cost  of  sales,  the  g:ross  trading  profit,  the  «reneral 
expense,  the  net  trading  profit,  the  profit  or  loss  from  futures,  and 
the  total  net  profit  including  futures,  per  bushel,  bv  companies,  for 
1920  and  1921  : 


Table  34. 


-Sales  realisation,  cost  of  sales,  and  net  profit  per  bushel  for  harley 
exported,  iy  companies,  1920  and  1921. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1.. 

1921. 

$0,838 
.689 
.894 
1.029 
1.242 
1.005 
.697 
.813 
1.044 
.777 
.911 

$0  <506 

.683 

.805 

.904 

1.335 

1.154 

.697 

.773 

1.01 

.763 

.887 

$0,032 

.006 

.089 

.125 

1.093 

1.149 

$0,018 
.012 
.005 
.006 
.024 
.005 
.001 
.008 
.025 
.005 
.007 

$0. 014 

1.006 

.084 

.119 

1.117 

1  .  154 

1. 001 

.032 

.009 

.009 

.017 

$0,007 
.001 
.001 
.036 
.006 
.016 

$0. 021 

2.. 

1.005 

3 

.085 

4 

.1.55 

5 

1.111 

6 

1.138 

7 

1.004 

n 

.01 
.034 
.014 
.024 

.032 

9 

.009 

10 

.009 

11 , 

.0  6 

.063 

Arerage 

1920. 

.86 

.848 

.012 

.011 

.001 

.009 

.01 

1.. 

1.389 

1.744 

1.388 

1.53 

1.243 

1.205 

1.361 

2.097 

3.061 

1.722 

1.481 

l.r-9 

1.353 

1.593 

1.428 

1.492 

1.298 

1.186 

1.337 

1.8!2 

2.96. 

1.729 

1.52 

1.188 

.036 

.151 

1.04 

.038 

!.055 

.019 

.021 

.255 

.096 

1.007 

1.039 

1.109 

.084 

.021 

.006 

.016 

.007 

.004 

.013 

.009 

.02 

.009 

.009 

.009 

1.048 

.13 

i.0'6 

.022 

1.062 

.015 

.011 

.216 

.076 

1.016 

1.018 

1.118 

.017 
.015 

1  .002 
.223 
.002 
.002 

1.031 

2 

.145 

3 

1.046 

4 

.02 

5 

.161 

6 

.017 

7 

.013 

8 

.246 

9 

.076 

10 

I  .  023 

1.039 

11 

1.018 

12 

.033 

1.085 

Average 

1.485 

1.474 

.011 

.018 

1.007 

.009 

.002 

'Loss. 

»  Less  than  0.05  of  1  per  cent. 

The  net  sales  realization  for  1920  shows  wide  variations,  from  a 
minimum  of  $1.08  to  a  maximum  of  $3.06  per  bushel.  The  range 
for  1921  was  not  so  pronounced,  extending  from  almost  $0.70  to 
a  little  more  than  $1.24  per  bushel.  Of  the  12  companies  shown 
for  1920,  5  show  gross  trading  losses,  while  for  1921  losses  are  shown 
for  2  companies.  Net  trading  losses  are  indicated  for  6  companies 
in  1920,  the  range  for  all  companies  being  from  an  average  loss  of 
almost  $0.12  per  bushel  to  a  gain  of  about  $0.25  per  bushel.  For 
1921  net  trading  losses  were  shown  for  4  companies,  the  range 
for  all  companies  being  from  an  average  loss  of  a  little  over  $0.15 
to  an  average  gain  of  about  $0.12  per  bushel.  For  1920,  8  of  the 
12  companies  showed  transactions  in  futures,  and  of  this  number 
only  2  had  losses.  Seven  of  the  11  companies  in  1921  showed  profits 
from  operations  in  futures.  P'or  the  total  net  profits,  including 
futures,  5  companies  showed  losses  in  1920,  the  range  for  this  year 
being  from  an  average  loss  of  $0,085  to  an  average  gain  of  almost 
$0.25  per  bushel,  while  for  1921,  4  companies  showed  losses,  the 
range  for  this  year  extending  from  an  average  loss  of  about  $0.14  to 
an  average  gain  of  approximately  $0.16  per  bushel. 


86 


METHODS   AND   OPERATIONS   OF    EXPORTERS. 


Net  PROFIT  ON  BARLEY  FOR  FOBBERS. — Of  the  7  Companies  engaged 
in  wheat  fobbing  in  1920  and  1921,  4  fobbed  barley  in  1920  and  5 
in  1921.  Tlie  average  net  sales  realization  per  bushel  for  all  com- 
panies was  $1.56  in  1920  and  almost  $0.95  in  1921.  The  gross  trad- 
ing profit  averaged  4.3  cents  per  bushel  in  1920,  while  1921  showed 
an  average  loss  of  8.4  cents  per  bushel.  The  net  trading  profit 
averaged  3.1  cents  per  bushel  in  1920,  and  for  1921  an  average  loss 
per  bushel  of  9.9  cents  was  shown.  After  adding  the  profit  or  loss 
from  futures  the  average  profit  was  2.9  cents  for  1920  and  the  loss 
was  9.4  cents  per  bushel  for  1921. 

The  following  table  shows  for  fobbers  the  net  sales  realization, 
the  cost  of  sales,  the  gross  trading  profit,  the  general  expense,  the 
net  trading  profit,  the  profit  or  loss  from  futures,  and  the  total  net 
profit  including  futures,  per  bushel  on  barley,  by  companies,  for 
1920  and  1921: 

Table  35. — Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  barley 
fobbed,  by  companies,  1920  and  1921. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit,  in- 
cluding 
futures. 

1921. 
1 

$0,612 
1.112 
1.61 
1.002 
.597 

$0. 736 

1.073 

1.844 

1.005 

.59 

1  $0. 124 
.039 
1.234 
1.003 
.007 

$0,009 
.011 
.01 
.008 
.022 

1  ?0. 133 
.028 
1.244 
1.011 
1.015 

1  $0. 133 

2 

.C28 

3 

$0.01 

1.2.34 

4 

1.011 

6 

.004 

i.CU 

Average 

.948 

1.032 

1.084 

.015 

1.099 

.005 

1.094 

1920. 
1 

1.475 
1.807 
1.479 
1.06 

1.418 
1.729 
1.458 
1.213 

.057 
.078 
.021 
1.153 

.015 
.014 
.01 
.018 

.042 
.064 
.011 
1.171 

i.«03 

.039 

2 

.064 

3 

1.002 

.009 

4 

1.171 

Average 

1.56 

1.517 

.043 

.012 

.031 

1.002 

.029 

1  Loss. 


The  net  sales  realization  for  barley  fobbed  in  1920  ranged  from 
$1.06  per  bushel  to  about  $1.81  per  bushel.  In  1921  the  range  was 
more  marked,  extending  from  approximately  $0.60  to  $1.61  per 
bushel.  The  gross  trading  profit  in  1920  ranged  from  a  loss  of  15.3 
cents  to  a  maximum  profit  of  7.8  cents  per  bushel.  Three  companies 
showed  cost  of  sales  in  excess  of  the  net  sales  realization  in  1921. 
This  gave  for  all  companies  a  range  in  the  gross  trading  profit  from 
a  loss  of  a  little  over  $0.23  to  a  gain  of  almost  $0.04  per  bushel. 
The  net  trading  profit  for  1920  ranged  from  a  loss,  in  the  case  of 
one  company,  of  17.1  cents  per  bushel,  to  a  maximum  profit  of  6.4 
cents  per  bushel.  Only  one  company  showed  a  net  trading  profit 
in  1921,  the  range  for  all  companies  extending  from  a  loss  of  a 
little  over  $0.24  to  a  profit  of  not  quite  $0.03  per  bushel.  Two 
fobbers  dealt  in  futures  on  barley  in  1920,  both  shoAving  losses,  and 
in  the  following  year  two  fobbers  showed  profits  from  futures. 
The  total  profits  for  1920,  including  futures,  ranged  from  a  loss  of 
17.1  cents  to  a  maximum  gain  of  6.4  cents  per  bushel.  In  1921  only 
one   company    showed    a   profit   on   barley    including   futures,    the 


INVESTMENT   AND   EARNINGS. 


87 


amount  being  2.8  cents  per  bushel.     The  losses  of  the  remaining 
companies  ranged  from  1.1  cents  to  23.4  cents  per  bushel. 

Net  profit  on  oats  for  exporters. — There  were  18  companies  that 
exported  oats  in  1920  and  11  companies  in  1921.  The  average  net 
realization  from  sales  for  all  companies  was  about  $0.90  per  bushel 
in  1920  and  about  $0.69  in  1921.  In  1920  a  gross  trading  loss  of 
1.8  cents  per  bushel  is  indicated  as  the  average  for  all  companies, 
while  for  1921  there  was  a  gross  trading  profit  of  1.4  cents  per  bushel. 
The  average  net  trading  loss  for  all  companies  in  1920  was  2.8  cents 
per  bushel  and  the  average  net  trading  profit  in  1921  was  0.7  of  a 
cent  per  bushel.  Future  operations  showed  an  average  net  gain  for 
both  years,  which,  when  added  to  the  net  trading  profits,  resulted  in 
a  total  net  loss  for  all  companies  of  2.3  cents  per  bushel  in  1920  and 
a  total  net  profit  of  2.8  cents  per  bushel  in  1921.  The  following  table 
shows  for  exporters,  by  companies,  the  net  sales  realization,  cost  of 
sales,  gross  trading  profit,  general  expense,  net  trading  profit,  profit 
or  loss  on  futures,  and  the  total  net  profit  including  futures,  .per 
bushel,  for  1920  and  1921 : 


Table  -36. 


-Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  oats 
ed' ported,  by  companies,  1920  and  1921. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
g«neral 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1.. 

1921. 

$0. 623 
.471 
.504 
1.029 
.715 
.922 
.516 
.50 
.498 
.542 
.396 

$0,638 
.461 
.423 
.904 
.678 
.957 
.532 
.482 
.469 
.54 
.457 

1  $0,015 
.01 
.081 
.125 
.037 
1.035 
1.016 
.018 
.029 
.002 
1.061 

$0,018 
.012 
.005 
.006 
.01 
.006 
.004 
.009 
.005 
.006 
.008 

1  $0,033 
1.002 
.076 
.119 
.027 
1.041 
1.02 
.009 
.024 
1.004 
1.069 

$0,006 
.001 

1.024 
.036 
.004 
.031 

1.042 
.002 

1.004 
.017 
.049 

1  $0. 027 

2 

1.001 

3 

.052 

4 

.155 

5                

.031 

6 

1.01 

7 

1.062 

S 

.011 

9 

.02 

10 

.013 

11 

'.02 

Average 

1920. 

.685 

.671 

.014 

.007 

.007 

.021 

.028 

1.. 

.899 
.829 
.902 
.859 
.953 
.955 
.907 
.935 
.791 
.857 
.865 
1.02 
1.018 

.898 
.792 
.916 
.843 

1.13 
.95 
.868 
.911 
.795 
.849 
.895 

1.066 
.972 

.001 
.037 

1.014 
.016 

1.177 
.005 
.039 
.024 

1.004 
.008 

1.03 

1.046 
.046 

.085 

.021 

.006 

.015 

.007 

.003 

.011 

.01 

.02 

.009 

.029 

.019 

.008 

1.084 
.016 
1.02 
.001 
1.184 
.002 
.028 
.014 
1.024 
1.001 
1.059 
1.065 
.038 

.017 
1.003 
1.002 
1.0S7 
.174 
.009 
1.029 

1.067 

2 

.013 

3 

1.022 

4 

1.086 

5 

1.01 

6 

.011 

7 

1.001 

8 

.014 

9 

1.004 
.018 

1.028 

10 

.017 

11 

1.059 

12   .. 

.057 
1.002 

1.008 

13 

.036 

Average 

.895 

.913 

1.018 

.01 

1.028 

.005 

1.023 

1  Loss. 


In  1920  the  average  per  bushel  sales  realization  ranged  from  about 

$0.79  to  $1.02,  while  in  1921  the  range  was  from  almost  $0.40  to  about 
$1.03.  Five  of  the  13  companies  showed  gross  trading  losses  in  1920, 
and  in  1921  gross  trading  losses  are  shown  for  4  of  the  11  companies. 
Net  trading  losses  are  shown  for  seven  companies  in  1920,  the 
greatest  amounting  to  18.4  cents  per  bushel  while  the  largest  gain 


88 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


was  '3.8  cents  per  bushel.  For  1921  there  were  six  companies 
that  showed  net  tradin<?  losses,  the  largest  being  G.9  cents  per 
bushel.  The  remaining  companies  showed  profits  ranging  as  high 
as  11.9  cents  per  bushel.  In  1920,  11  of  the  13  companies  hedged 
on  oats,  0  showing  net  losses  and  5  net  gains  from  these  opera- 
tions. All  of  the  companies  represented  in  1921  traded  in  oats 
futures,  and  only  3  out  of  the  11  showed  net  losses  therefrom.     In 

1920,  after  including  the  results  of  future  trading,  8  of  the  13  com- 
panies showed  los.ses  ranging  from  0.1  of  a  cent  per  bushel  to  8.6 
cents;  while  5  companies  showed  profits  ranging  from  1.1  cents  to 
3.G  cents  per  bushel.  Five  of  the  11  companies  in  1921  show^ed  total 
net  losses,  including  the  results  from  futures,  the  range  being  from 
0.1  of  a  cent  to  6.2  cents  per  bushel,  while  the  profits  of  the  remain- 
ing companies  ranged  from  1.1  cents  to  15.5  cents  per  bushel. 

Net  profit  o>:  oats  for  fobbers. — Six  of  the  fobbers  whose  profits 
are  presented  in  this  report  bought  and  sold  oats  in  1920  and  eight 
in  1921.  The  net  sales  realization  for  all  companies  averaged  about 
$0.87  per  bushel  in  1920  and  about  $0.57  per  bushel  in  1921.  For  all 
companies  combined  an  average  gross  trading  loss  of  0.3  of  a  cent 
per  bushel  is  shown  for  1920  and  2.6  cents  per  bushel  for  1921, 
while  the  net  trading  loss  for  1920  was  1.7  cents,  and  for  1921  it  was 
3.5  cents  per  bushel.  Futures  transactions  showed  a  net  profit  for 
all  companies  combined  both  in  1920  and  1921,  which,  when  added 
to  the  net  trading  profit,  made  a  total  net  profit  for  all  companies  of 
1  cent  per  bushed  in  1920  and  a  net  loss  of  1.5  cents  per  bushel  in 

1921.  The  following  table  shows,  for  fobbers,  by  companies,  the  net 
sales  realization,  cost  of  sales,  gross  trading  profit,  general  expense, 
net  trading  profit,  profit  or  loss  on  futures,  and  total  net  profit 
including  futures,  per  bushel,  for  1920  and  1921 : 


Table  37.- 


-Sales  realization,  cost  of  sales,  and  net  profit  per  bushel  for  oats 
fobbed,   by  companies,   1920  and  1921. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1921. 
1 

80.554 
.604 
.473 
.783 
.598 
.623 
.405 
.667 

$0,573 
.763 
.532 
.871 
.622 
.759 
.398 
.615 

1  $0. 021 
1.159 
1.059 
1.088 
1.024 
1.156 
.007 
.052 

$0,008 
.012 
.017 
.01 
.01 
.022 
.009 
.011 

1  $0. 029 
1.171 
1.076 
1.098 
1.034 
1.158 
1.002 
.041 

so.oos 

.101 
.072 
.114 
.041 
.106 

1  $0.  021 

2     

1.01 

3 

1.004 

4 

.016 

5 

.007 

6 

1  .  052 

7 

1.002 

8 

1.024 

.017 

Average 

.569 

.595 

1.026 

.009 

1.035 

.02 

1.015 

1920. 
1 

.82 
.852 
1.697 
.791 
.584 
.892 

.833 
.846 
1.645 
.752 
.612 
.846 

1.013 
.006 
.052 
.039 

1.028 
.046 

015 
013 
01 

.018 

.01 

.013 

1.028 

1.007 

.042 

.021 

1.038 

.033 

.036 
1.01 
1.04 
1.059 

.008 

2 

1.017 

3 

.002 

4 

1.038 

5 

1.038 

6 

.068 

.101 

Average 

.871 

.874 

1.003 

.014 

1.017 

.027 

.01 

A  rather  wide  range  was  shown  for  the  net  sales  realization  in 
1920,  the  lowest  average  being  about  $0.58  and  the  highest  almost 


INVESTMENT    AND    EARNINGS. 


89 


$1.70  per  bushel.  The  range  in  1921  extended  from  about  i^'0.41  to 
$0.78  per  bushel.  Two  of  the  six  companies  showed  gross  trading 
losses  in  1920,  while  for  1921  six  of  the  eight  companies  showed 
gross  trading  losses.  Of  the  three  companies  showing  net  trading 
losses  in  1920,  the  greatest  loss  averaged  3.8  cents  per  bushel,  while 
the  largest  gain  for  a  particular  company  was  4.2  cents  per  bushel. 
For  1921  one  company  show^ed  an  average  net  trading  profit  of  4.1 
cents  per  bushel  and  the  remaining  seven  companies  showed  losses 
ranging  from  0.2  of  a  cent  per  bushel  to  17.1  cents  per  bushel.  All 
but  one  company  dealt  in  oats  futures  in  1920,  three  companies  show- 
ing losses  therefrom  and  two  companies  gains,  so  that  for  the  total 
net  profits,  including  futures,  3  companies  showed  profits  ranging 
from  0.2  of  a  cent  to  10.1  cents  per  bushel,  and  three  companies 
showed  losses  ranging  from  1.7  cents  to  3.8  cents  per  bushel.  For 
1921  all  except  one  company  dealt  in  oats  futures  and  only  one 
company  showed  a  loss  from  the  j^ear's  transactions.  Three  com- 
panies showed  profits,  including  futures,  ranging  from  0.7  of  a  cent 
per  bushel  to  1.7  cents  per  bushel,  while  five  companies  had  losses 
ranging  from  0.2  of  a  cent  per  bushel  to  5.2  cents  per  bushel. 

Net  profit  on  corn  for  exporters. — C'f  the  companies  here  con- 
sidered 13  exported  corn  in  1920  and  15  in  1921.  The  average  net 
sales  realization  for  all  companies  was  about  $1.36  per  bushel  in 
1920  ami  $0.80  in  1921.  The  gross  trading  profit  for  all  companies 
in  1920  averaged  2.5  cents  per  bushel,  and  in  1921  there  was  a  loss 
of  0.6  of  a  cent  a  bushel ;  while  an  average  net  trading  profit  of 
1.2  cents  per  bushel  is  shown  for  all  companies  in  1920  and  a  net 
trading  loss  of  1.3  cents  per  bushel  in  1921.  The  net  results  of 
transactions  in  futures  for  all  companies  in  1920  changed  the  net 
trading  profit  result  to  an  average  net  loss  of  1.4  cents  per  bushel; 
while  for  1921  the  net  trading  loss  is  changed,  after  including  gains 
from  futures,  to  an  average  net  profit  of  0.1  of  a  cent  per  bushel. 

The  following  table  gives,  for  exporters,  by  companies,  the  net 
sales  realization,  cost  of  sales,  gross  trading  profit,  general  expense, 
net  trading  profit,  profit  or  loss  on  futures,  and  total  net  profit  in- 
cluding futures,  per  bushel  on  corn  for  1920  and  1921 : 

Table  38. — Sales  reulization,  cost  of  sales,  and  net  profit  per  hushel  for  corn 
exported,  by  companies,  1920  and  1921. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
e.xpense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1921. 
1 

$0,878 
.69 
.879 
.748 
.817 
.839 
.765 
.864 
.866 
.745 
.807 
.708 
.733 
.69 
.818 

$0,876 
.691 
.811 
.774 
.831 
.854 
.757 
.879 
.886 
.745 
.81 
.698 
.841 
.709 
.816 

$0,002 
1.001 
.068 
1.026 
1.014 
1.015 
.008 
1.015 
1.02 

$0,018 
.011 
.005 
.006 
.01 
.005 
.004 
.005 
.025 
.005 
.009 
.007 
.039 
.023 
.008 

1  $0,016 
1.012 

.063 
1.032 
1.024 
1.02 

.004 
1.02 
1.045 
1.005 
1.012 

.003 
1.147 
1.042 
1.006 

$0,007 
.002 
1.003 
.031 
.022 
.C19 
.002 
.(H11 
.024 
.  006 
.024 
1  1)04 
.104 
.008 
.027 

1 $0,009 
1.01 

.06 
1.001 
1.002 
1.001 

.006 
1.019 
1.021 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

1.003 

.01 
1.108 
1.019 

.002 

.012 
1  001 

12 

13 

I  043 

14 

1.034 

ft91 

15 

Average  — 

.80 

.806 

1.006 

.007 

1.013 

.014  1               .001 

1  Loss. 


90  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

Table  28. — Sales  realization,  coat  of  sales,  etc. — Coiitinuofl. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
cxijense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1920. 
1   

$2. 105 
.98 
l.,581 
1.617 
1.161 
1.533 
1.157 
1.622 
1.695 
1.0S6 
.992 
1.697 
1.629 

$1,672 
.951 
1.626 
1.616 
1.177 
1.438 
1.147 
1.585 
1.581 
1.056 
1.134 
1.637 
1.767 

$.433 
.029 

1.045 
.001 

1.010 
.095 
.01 
.a37 
.114 
.03 

1. 142 
.06 

1.138 

$.084 
.021 
.007 
.018 
.003 
.011 
.009 
.011 
.009 
.009 
.009 
.03 
.019 

$.349 
.008 
1.052 
1.017 
1.019 
.084 
.001 
.026 
.105 
.021 
1.151 
.03 
1.157 

$.017 
1.029 
1.005 
1.381 
.029 
1.0.57 
1.025 

$.366 

2         

1.021 

3    

1.057 

4       

1. 398 

5           

.01 

G   

.027 

1.024 

8            

.026 

9 

.122 
.005 
.067 

.227 

10     

.026 

11 

1.084 

12 

.03 

13       - 

.003 

1. 1.54 

Average  — 

1.359 

1.334 

.025 

.013 

.012 

1.026 

1.014 

1  Loss. 

For  1920  the  average  net  sales  realization  for  the  different  com- 
panies showed  wide  variations,  ranging  from  $0.98  per  bushel  to 
almost  $2.11  per  bushel.  The  variation  in  1921  was  not  nearly  so 
pronounced,  the  range  extending  from  $0.69  to  about  $0.88  per  bushel. 
Four  of  the  13  companies  in  1920  showed  gross  trading  losses ;  while 
for  1921,  9  of  the  15  companies  showed  gross  trading  losses  and  1 
company  showed  neither  gain  nor  loss.  For  1920  the  net  trading 
profits,  ranging  from  one-tenth  of  a  cent  to  34.9  cents  per  bushel,  are 
shown  for  8  companies ;  and  for  the  remaining  5  companies  net  trad- 
ing losses  are  shown  which  ranged  from  1.7  cents  to  15.7  cents  per 
bushel.  For  1921  only  3  of  the  15  companies  show  net  trading 
profits,  ranging  from  three-tenths  of  a  cent  to  6.3  cents  per  bushel; 
the  remaining  12  companies  showed  net  trading  losses  which  ranged 
from  five-tenths  of  a  cent  to  14.7  cents  per  bushel.  All  except  2  of 
the  companies  in  1920  dealt  in  futures  on  corn ;  6  companies  showed 
profit  from  these  transactions  and  5  losses,  which,  when  added  to  the 
net  trading  profits  or  losses,  gave  for  7  companies  total  net  profits 
ranging  from  1  cent  to  36.6  cents  per  bushel,  and  for  6  companies 
total  net  losses  ranging  from  2.1  cents  to  39.8  cents  per  bushel.  All 
of  the  companies  dealt  in  futures  on  corn  in  1921,  2  of  the  companies 
showing  losses  of  three-tenths  of  a  cent  and  four-tenths  of  a  cent, 
respectively,  and  the  remaining  13  companies  showing  gains  ranging 
from  one-tenth  of  a  cent  to  10.4  cents  per  bushel.  When  these 
futures  profits  and  losses  were  included,  net  profits  were  shown  for  5 
companies,  ranging  from  one-tenth  of  a  cent  to  6  cents  per  bushel, 
and  net  losses  for  10  companies  ranging  from  one-tenth  of  a  cent  to 
4.3  cents  per  bushel. 

Net  profit  on  corn  for  fobbers. — Results  aro  presented  for 
seven  companies  that  fobbed  corn  in  1920  and  for  eight  com- 
panies in  1921.  The  average  net  sales  realization  per  bushel 
for  all  companies  combined  auiounted  to  almost  $1.50  in  1920 
and  a  little  over  $0.82  in  1921,  For  all  companies  combined  a 
gross  trading  loss  of  3.6  cents  per  busliel  was  shown  for  1920  and 
a  loss  of  three-tenths  of  a  cent  per  bushel  for  1921,  while  the  net  trad- 
ing loss  for  all  companies  averaged  4.9  ce.nts  per  bushel  in  1920  and 


INVESTMENT   AND   EARNINGS. 


91 


1.3  cents  per  bushel  in  1921.  The  futures  operations  showed  a  profit 
averaging  for  all  companies  2.1  cents  per  bushel  in  1920  and  1.9 
cents  per  bushel  in  1921.  When  the  profits  on  futures  were  included 
the  total  net  loss  was  reduced  to  2.8  cents  per  bushel  in  1920  and  a 
total  net  profit  of  six-tenths  of  a  cent  per  bushel  was  shown  for  1921. 
The  following  table  shows,  for  fobbers,  by  companies,  the  net  sales 
realization,  cost  of  sales,  gross  trading  profits,  general  expense,  net 
trading  profit,  profit  or  loss  on  futures,  and  total  net  profit  including 
futures,  per  bushel  on  corn  for  1920  and  1921 : 

Table  39. — Sales  reuUzatioii,  cost  of  sales,  and  net  profit  per  bushel  for  corn 
fobbed,  by  companies,  1920  and  1921. 


Year  and  com- 
pany. 

Net  sales 
realization. 

Cost  of 
sales. 

Gross 
trading 
profit. 

Deduct 
general 
expense. 

Net  trading 
profit. 

Profit  or 
loss  on 
futures. 

Total  net 
profit  in- 
cluding 
futures. 

1. 

1921. 

$0.78 
.875 
.74 
.719 
.787 
.892 
.408 
1.025 

$0. 785 
.867 
.688 
.852 
.801 
.917 
.405 
.979 

ISO.  005 

.008 

.052 

1.133 

1.014 

1.025 

.003 

.046 

$0,009 
.011 
.017 
.01 
.011 
.022 
.009 
-Oil 

1  $0,014 
1  .003 

.035 
1.143 
1  .025 
1  .047 
1  .006 

.035 

$0,013 
.053 
.072 
.111 
.039 
1.038 

1  $0. 001 

2 

.05 

3 

.107 

4 

1.032 

.014 

6 

•  .085 

1  .006 

8 

I  .024 

.011 

Average. .. . 
1920. 

.821 

.824 

1  .003 

.01 

1.013 

.019 

.006 

1. 

1.647 
1.079 
2.0G9 
3.236 
1.667 
1.325 
1.625 

1.61 

1.076 

1.895 

3.138 

1.672 

1.362 

1.714 

.037 

.003 

.174 

.098 

1.005 

1.037 

1.089 

.015 

.013 

.024 

.009 

.018 

.01 

.013 

.022 
1.01 
.15 
.089 
1  .023 
1  .047 
1.102 

«.047 
1.006 
1.393 

1.08 
1  .034 

1.025 

2 

1  .016 

3 

1.243 

4 

.009 

5 

1  .057 

6... 

1  .047 

7.- 

.068 

» .o;j4 

Average 

1.496 

1.532 

1.036 

.013 

1.049 

.021 

1  .028 

1  Loss. 

The  net  sales  realization  for  the  different  companies  in  1920  showed 
variations  ranging  from  about  $1.08  to  almost  $3.24  per  bushel, 
while  the  variations  in  1921  ranged  from  approximately  $0.41  to 
nearly  $1.03  per  bushel.  Gross  profits  are  shown  for  four  companies 
in  1920,  the  remaining  three  companies  showing  losses;  and  for  1921 
four  companies  showed  gross  profits  and  the  remaining  four  com- 
panies losses.  Three  companies  showed  net  trading  profits  in  1920 
ranging  from  2.2  cents  to  15  cents  per  bushel  and  four  companies 
showed  net  trading  losses  ranging  from  1  cen"  to  10.2  cents  per 
bushel.  For  1921  two  companies  showed  net  trading  profits  of  3.5 
cents  per  bushel  each  and  six  companies  showed  net  trading  losses 
ranging  from  0.3  of  a  cent  to  14.3  cents  per  bushel.  In  1920  all 
except  one  company  dealt  in  futures  on  corn,  one  company  showing  a 
net  gain  and  the  remaining  five  net  losses  from  these  transactions. 
AVhen  the  profits  and  losses  from  futures  transactions  were  included, 
the  total  net  trading  profits  amounted  to  a  gain  of  0.9  of  a  cent  in  the 
case  of  one  company,  while  total  net  losses  ranging  from  1.6  cents  to 
24.3  cents  per  bushel  were  incurred  b\'  the  other  six  companies.  In 
1921  all  except  one  company  dealt  in  futures  on  corn,  five  companies 
showing  net  gains  ranging  from  1.3  cents  to  11.1  cents  per  bushel,  and 
two  companies  showing  net  losses  of  2.4  cents  and  3.8  cents  per  bushel, 


92  METHODS   AND   OPERATIONS   OF   EXPORTERS. 


respectively,  which,  when  added  to  the  net  trading  profits,  showed 
total  net  pi'ofits  ranging  from  1.1  cents  to  10.7  cents  per  l>usliel  in  the 
case  of  four  companies,  and  net  losses  ranging  from  0.1  of  a  cent  to 
8.5  cents  per  bushel  in  the  case  of  the  remaining  four  companies. 

Section  11.  Frequency  and  rate  of  return  on  turnover. 

A  very  significant  fact  in  the  grain  exporting  business  is  the 
frequency  of  the  turnover  of  the  capital  employed.  Export  and 
fob  sales  are  usually  made  in  comparatively  large  quantities  and 
the  lapse  of  time  between  the  purchase  and  sale  of  grain  is  short. 
In  1920  the  companies  engaged  largely  in  the  export  lousiness  had 
an  average  turnover  of  about  23  times  the  capital  stock,  surplus, 
and  reserves,  and  an  average  of  31  times  in  1021.  The  fobbers  had 
an  average  turnover  of  20  times  in  1920  and  over  21  in  the  follow- 
ing year.  Taking  individual  companies,  there  were  four  instances 
of  concerns  having  a  turnover  in  excess  of  100  times  in  1920  and 
1921,  while  there  were  13  in  excess  of  50  times,  and  only  four  with 
a  turnover  of  less  than  10  times  in  both  years.  Some  grain  mer- 
chants, it  may  be  noted,  are  "  in  and  out "  of  the  business  during 
the  year,  i.  e.,  they  are  not  active  in  the  trade  throughout  the  year. 

On  the  total  funds  employed  in  the  business,  i.  e.,  the  capital 
stock,  surplus,  reserves,  and  borrowed  money,  the  turnover  was  less 
frequent.  Tlie  average  turnover  for  exporters  was  10  times  in  1920 
and  about  15  times  in  1921,  and  for  fobbers  the  average  was  8 
times  in  1920  and  about  13  times  in  the  following  year.  For  ex- 
porters and  fobbers  combined  there  were  no  instances  for  individual 
companies  of  a  turnover  in  excess  of  100  times  on  the  total  funds 
employed  in  the  business,  and  only  one,  a  fobber,  in  excess  of  50 
times.  Fifteen  companies  had  a  turnover  of  less  than  10  times  in 
the  two  years. 

The  average  rate  of  return  on  the  capital  stock,  surplus,  and  re- 
serves per  turnover  for  exporters  was  about  2.5  per  cent  in  1920 
and  not  quite  1  per  cent  in  1921,  while  for  fobbers  the  average  was 
l.'J  and  1.8,  respectively.  For  individual  exporters  and  fobbers  there 
was  a  wide  variation.  For  exporters  the  range  was  from  a  minimum 
profit  of  four-tenths  of  1  per  cent  to  a  maximum  of  10.3  per  cent  in 
1920,  and  from  a  loss  of  1.1  per  cent  to  a  profit  of  4.7  per  cent  in 
the  following  year.  The  range  for  fobbers  was  from  a  loss  of  1.8 
to  a  profit  of  3.5  per  cent  in  1920  and  from  a  loss  of  about  1.4  to  a 
gain  of  nearly  3.5  per  cent  in  1921. 


i 


Chapter  VII. 
THE  UNITED  STATES  GRAIN  CORPORATION. 

Section  1.  Relations  of  Grain  Corporation  to  the  inquiry. 

The  Senate  resolution  directing  the  export  grain  inquiry  specifically 
stated  that  the  commission  should  begin  "  with  the  liarvest  of  the 
1919  crop  "  and  that  "  it  is  requested  that  the  United  States  Grain 
Corporation,  the  Department  of  Agriculture,  and  other  Government 
departments  and  the  United  States  Food  Administration  make  avail- 
able all  the  pertinent  records  from  these  several  departments  and 
organizations  for  the  use  of  the  commission." 

The  export  movement  from  the  United  States  of  a  new  crop  of 
wheat,  rye,  or  barley  is  usually  large  during  the  last  four  months  of 
each  calendar  year,  and  most  of  a  crop  that  is  exported  is  shipped 
during  the  fiscal  year  ending  June  30.  The  examination  of  the 
books  and  records  of  the  principal  firms  exporting  grain  from  the 
Gulf  and  Atlantic  seaboard  ports  disclosed  the  fact  that  the  quantity 
of  grain  exported  or  sold  for  export  by  them  was  very  small  for  the 
fiscal  year  ending  June  30,  1920.  This  was  due  to  the  fact  that  the 
United  States  Grain  Corporation  was  designated,  by  Executive  order, 
as  the  agency  to  carry  out  the  provision  of  the  law  guaranteeing  the 
minimum  price  of  wheat.  (See  p.  97.)  In  order  to  maintain  this 
minimum  price  and  to  protect  the  Government  against  loss,  the  Grain 
Corporation  purchased  and  sold  the  bulk  of  the  1919  crop  exported. 
Hence  it  was  necessary  to  examine  the  accounts  of  the  Grain  Corpo- 
ration and  to  report  the  facts  in  order  to  adequately  answer  the 
inquiry  of  the  Senate.  As  the  Grain  Corporation  was  not  operated 
for  profit  and  its  activities  were  not  comparable  with  those  of  private 
concerns,  the  discussion  of  its  operations  are  presented  in  a  separate 
chapter. 

Section  2.  Conditions  prior  to  organization. 

There  Avas  a  distinct  shortage  of  wheat  in  the  United  Stat^^s  in 
1917.  The  production  in  1916  was  less  than  640,000,000  bushels,  or 
more  than  37  per  cent  smaller  than  the  1915  crop,  which  was  over  a 
billion  bushels.  The  prospects  for  the  1917  wheat  crop  were  very 
poor.  Owing  to  the  fast  shrinking  merchant  shipping  space,  result- 
ing from  the  destruction  of  tonnage  by  unrestricted  submarine  war- 
fare and  the  diversion  of  ships  to  the  transportation  of  troops  and 
munitions,  it  was  practically  impossible  to  reach  the  wheat  in  the 
distant  markets  of  Argentina  and  Australia,  and  the  Allies  were 
forced  to  rely  on  America  for  the  bulk  of  their  supply  of  wheat  and 
wheat  flour.  Influenced  by  the  above  conditions,  the  price  of  wheat 
of  the  1916  crop  advanced  rapidly,  reaching  a  high  point  in  May, 
1917,  when  cash  wheat  in  Chicago  sold  as  high  as  $3.45  per  bushel. 
The  wheat  and  flour  markets  were  totally  demoralized,  and  specu- 

93 


94  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

lation  in  these  commodities  developed  to  such  an  extent  that  the 
directors  of  the  Chicago  Board  of  Trade  prohibited  furtiier  trading 
in  May  futures  and  forced  settlement  of  outstanding  May  contracts 
at  a  price  fixed  by  a  committee,  wliicli  named  $8.18  per  busliel.  After 
this,  prices  began  to  drop  and  millers  and  dealers  began  buying  only 
for  current  demands.  On  July  10,  1917,  the  Food  Administrator 
addressed  the  President,  describing  the  situation  in  part  as  follows :  ^ 

During  recent  months  the  allied  governments  have  consolidated  their  buying 
into  one  hand  in  order  that  tliey  might  relieve  tlie  burden  of  speculation  from 
their  own  consumers,  and  as  the  restricted  exports  to  neutrals  are  but  a  minor 
item,  the  export  price,  if  not  controlled,  is  subject  to  the  will  of  tlie  allied 
buyer,  and,  in  a  great  measure,  the  American  producer  left  to  his  judgment  and 
without  voice. 


The  net  result  of  this  situation  is  that  unless  some  strong  and  efficient  gov- 
ernment action  is  immediately  settled  and  brought  into  play,  the  American 
producer  will  face  a  slump  in  wheat,  and  in  any  event  the  price  of  export  wheat 
will  be  dictated  by  a  single  agency  and  the  American  consumer  will  be  faced 
with  a  large  part  of  the  essential  breadstuff  having  passed  into  the  hands  of 
speculators. 

The  Government  believed  it  faced  two  important  problems — first, 
to  stabilize  the  price  of  wheat  at  a  point  sufficiently  high  to  stimulate 
production  and  at  the  same  time  to  keep  the  price  of  In-eadstuffs  as 
low  as  possible  to  the  consumer,  and  second,  to  establish  a  control 
over  the  distribution  of  Avheat  and  flour  by  retaining  in  this  country 
a  quantity  sufficient  for  domestic  consimiption  and  at  the  same  time 
giving  the  maximum  available  quantity  to  the  Allies.  These  factors 
were  among  conditions  which  led  to  the  passage  of  the  food  control 
law. 

Section  3.  Government  price  control. 

United  States  Food  Administration. — On  April  7,  1917,  the  day 
following  the  declaration  of  war  against  Germany,  the  Council 
of  National  Defense  cabled  Herbert  Hoover,  who  was  then  in 
Europe,  requesting  him  to  become  "  its  advisor  upon  food  and  price 
problems."  Mr.  Hoover  returned  on  May  7,  1917,  and  the  President 
appointed  him  Food  Administrator  of  the  United  States,  pending 
legislation  authorizing  control  of  food  distribution  and  prices.- 

The  Food  Administrator  began  at  once  to  la}^  the  foundation  for 
a  food  control  law,  and  his  recommendations  and  those  of  the  Presi- 
dent regarding  food  control  were  embodied  in  a  bill  known  as  the 
Lever  bill,  introduced  in  Congress  on  June  11,  1917,  which  became 
a  law  August  10  of  the  same  year. 

The  reason  for  the  enactment  and  the  purpose  of  the  Lever  Act 
is  stated  in  section  1  of  the  amended  act,  as  follows : 

That  by  reason  of  the  existence  of  a  state  of  war,  it  is  essential  to  the 
national  security  and  defense,  for  the  successful  prosecution  of  the  war.  and 
for  the  support  and  maintenance  of  the  Army  and  Navy  to  assure  an  adequate 
supply  and  equitable  distribution,  and  to  facilitate  the  movement  of  foods,  feeds, 
wearing  apparel,  containers  primarily  designed  or  intended  for  containing 
foods,  feeds,  or  fertilizers ;  fuel,  inciuding  fuel  oil  and  natural  gas,  and  fertilizer 
and  fertilizer  ingredients,  tools,  utensils,  implements,  machinery,  and  equipment 

'The  Official  Bulletin,  July  11,  1917,  p.  3. 

"  War  Industries  Board,  Government  Control  Over  Prices,  p.  40. 


UNITED  STATES  GRAIN   CORPORATION.  95 

required  for  the  actual  production  of  foods,  feeds,  and  fuel,  hereafter  in  this  act 
called  necessaries;  to  prevent,  locally  or  generally,  scarcity,  monopolization, 
hoarding,  injurious  speculation,  manipulation,  and  private  controls  affecting 
such  supply,  distribution,  and  movement;  and  to  establish  and  maintain  gov- 
ernmental control  of  such  necessaries  during  the  war. 

This  act  gave  the  President  authority  to  create  an}'  agency  or 
agencies  and  to  utilize  any  department  or  agency  of  the  Govern- 
ment in  carrying  out  its  provisions.  On  August  10,  1917,  the  same 
day  the  food  control  act  was  approved,  the  President  issued  an  Exec- 
utive order  creating  the  United  States  Food  Administration  and 
appointing  Herbert  Hoover  United  States  Food  Administrator. 
The  above  act  and  Executive  order  gave  a  legal  status  to  what  had 
already  been  done  in  the  previous  three  months  by  the  Food  Admin- 
istrator, who,  working  under  a  special  allowance  from  the  President's 
emergency  fund,  had  built  up  a  staff  of  450  persons  and  was  ready  to 
begin  the  administration  of  the  food-control  law. 

On  August  14,  1917,  the  President,  acting  under  authority  of  sec- 
tion 5  of  the  food  control  act,  issued  a  proclamation  requiring  "  all 
persons,  firms,  corporations,  and  associations  engaged  in  the  business 
of  either  storing  or  distributing  wheat  or  rye,  as  owners,  lessees, 
or  operators  of  warehouses  or  elevators,"  and  all  manufacturers  of 
any  products  derived  from  wheat  or  rye  (except  mills  with  a  daily 
capacity  of  100  barrels  or  less  and  farmers  and  cooperative  associa- 
tions of  farmers)  to  secure  a  license  from  the  Food  Administrator 
on  or  before  September  1,  1917.  Proclamations  were  issued  on  Octo- 
ber 8,  1917,  requiring  wholesale  dealers  in  various  grain  and  grain 
products,  and  on  November  7,  1917,  requiring  bakers  of  bread,  cakes, 
crackers,  etc.  (except  those  consuming  less  than  10  barrels  of  flour 
per  month),  to  secure  license  from  the  Food  Administrator. 

Licenses  were  issued  under  the  above  proclamations  conditioned 
upon  the  licensee  observing  the  regulations  issued  by  the  Food  Ad- 
ministrator, among  which  were  regulations  providing  that  the  licensee 
should  sell  such  commodities  "  at  not  more  than  a  reasonable  advance 
over  the  actual  purchase  price  of  the  particular  products  without  re- 
gard to  the  market  or  replacement  value  at  the  time  of  such  sale." 
The  regulations  provided  "  that  if  any  licensee  pays  more  for  wheat 
than  the  customary  market  price  in  that  locality,  as  evidenced  by  the 
price  established  for  Government  purchases  at  the  nearest  terminal 
market,  less  freight,  he  shall  not  be  permitted  to  charge  as  costs  the 
excess  over  such  market  price." 

Guaranteed  w^heat  prices. — Under  the  food  control  act  of  August 
10,  1917,  the  United  States  Government  undertook  to  guarantee  to 
the  producers  of  wheat  a  price  to  be  fixed  by  the  President.  The 
President  was  authorized,  Avhenever  he  should  find  that  "  an  emer- 
gency exists  requiring  stimulation  of  the  production  of  wheat,"  and 
that  it  was  essential  that  producers  should  have  the  benefits  of  the 
guaranteed  price,  "  to  determine  and  fix  and  to  give  public  notice 
of  what  under  specified  conditions  is  a  reasonable  guaranteed  ]irice 
for  wheat  in  order  to  assure  such  producers  a  reasonable  jirofit." 
The  law  fixed  the  minimum  guaranteed  price  for  the  1918  Avheat  crop 
"  based  upon  No.  1  northern  spring  or  its  equivalent  at  not  less  than 
$2  per  bushel  at  the  principal  interior  primary  markets."  The 
guaranteed  price  determined  by  the  President  for  the  1918  crop  was 
somewhat  higher  than  the  minimum,  as  shown  below.    (See  p.  98.) 


96 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


Fair  price  for  the  1917  wheat  chop. — The  minimum  price  of  $2 
per  bushel  fixed  by  Confyress  for  the  1918  wheat  crop  did  not  apply 
to  the  1917  harvest.  The  President,  actinj^  under  autliority  of  the 
food  control  act,  api^ointed  a  committee  '■  to  conduct  an  incjuiry  into 
all  the  different  factors  in  the  grain  situation  and  to  make  a  report 
which  would  enable  him  to  establish  a  price  for  the  1917  wheat  crop. 
The  committee  reported  to  the  President  on  August  30.  1917,  recom- 
mending "  that  the  price  on  No.  1  northern  spring  wheat,  or  its 
equivalent,  at  Chicago  be  $2.20  per  bushel."  The  following  table 
shows  the  prices  recommended  for  the  different  kinds  of  No.  1  w  heat : 

Table  40. — Prices  e-^ffthlished  hy  the  Government  for  No.  1  wheat  per  bushel, 
Chicago  basis,  by  kinds,  for  the  1917  crop. 


Kind  of  wheat. 

Price  per 
bushel. 

Kind  of  wheat. 

Price  per 
bushel. 

Dark  hard  winter 

$2.24 
2.20 
2.20 
2.16 
2.  IS 
2.21 
2.20 
2.18 

tz.w 

Hard  winter 

2.24 

Red  winter 

2.20 

Yellow  hard  winter 

2.13 

Soft  red  winter 

2.13 

Dark  northern  spring 

2.20 

Northern  spring 

Soft  white    . 

2.18 

Red  spring 

Whiteclub 

2.16 

The  price  for  No.  2  grade  for  each  kind  of  wheat  was  fixed  at  3 
cents  per  bushel  less  than  No.  1,  while  No.  3  was  6  cents  less  and 
No.  4  10  cents  less  than  No.  1.  The  differentials  from  the  Chicago 
basis  for  the  principal  interior  terminal  and  seaport  markets  were 
also  fixed,  as  shown  in  the  following  table : 

Table  41. — Differential  in  cents  per  bushel  between  the  market  prices  at  im- 
portant interior  terminal  and  seaport  markets  for  the  1917  ivheat  crop. 


Market. 

Differential  per  bushel. 

Market. 

Differential  per  bushel. 

Chicago 

Base  price. 
Do. 
Do. 

2  cents  less  than  base. 

3  cents  less  than  base. 

Do. 

New  Orleans 

Do. 

Galveston 

St.  Louis 

Diiluth 

Do. 

Minneapolis 

Subsequent  to  August  30,  1917,  three  changes  Avere  made  in  the 
differentials;  first,  arrangements  Avere  made  for  overseas  transport 
from  the  Pacific  coast  and  the  base  price  for  bulk  wheat  was  fixed 
at  $2.05  for  Pacific  Northwest  points  and  $2.10  for  California  points; 
second,  a  ^eduction  of  2  cents  per  bushel  was  made  at  Philadelphia, 

»  H.  A.  Garfield,  president  of  Williams  College,  chairman  ;  Charles  G.  Barrett,  president 
Farmers'  Union,  Union  City,  Ga.  ;  William  N.  Doak,  vice  president  Brotherhood  of  Rail- 
road Trainmen,  Roanoke,  Va.  ;  Edw.  F.  Ladd,  president  North  Dakota  Ajrricultural  Col- 
lege, Fargo,  N.  Dak.  ;  R.  Goodwin  Rhett,  president  Chamber  of  Commerce  of  I'nited 
States,  Charleston,  S.  C.  ;  .7.  W.  Shortill,  secretary  National  Council  of  Farmers  Coopera- 
tive Association,  York,  Nebr. ;  James  W.  Sullivan,  American  Ji'ederation  of  Labor,  Brook- 
lyn, N.  Y.  ;  L.  .1.  Tabor,  master  Ohio  State  Grange  Barnesville,  Ohio  ;  Frank  W.  Taussig, 
chairman  of  U.  S.  Tariff.  Commi.ssion  ;  Theo.  N.  Vail,  president  American  Telephone  & 
Telegraph  Co.,  Ne  ■  York  City ;  Eugene  E.  Funk,  president  National  Corn  Association, 
Bloomingtou,  111. ;  Harry  J.  Waters,  president  Kansas  State  Agricultural  College,  Manhat- 
tan, Kans. 


UNITED   STATES  GRAIN   CORPORATIOIir. 


97 


Baltimore,  and  Xew  York,  "  in  consequence  of  the  suspension  of 
increase  of  rates  by  the  Interstate  Commerce  Commission  " ;  and 
third,  all  wheat  below  No.  3,  Federal  grading,  was  purchased  "  upon 
merits  instead  of  grade." 

In  announcing  the  above  prices  as  the  fair  prices  to  be  paid  for 
Government  purchases  on  August  30,  1917,  the  President  said: 

Section  11  of  the  Food  Act  provides,  among  other  things,  for  the  purchase 
and  sale  of  wheat  and  flour  by  the  Government,  and  appropriates  money  for 
that  purpose.  The  purcliase  of  wheat  and  flour  for  our  allies,  and  to  a  con- 
siderable degree  for  neutral  countries  also,  has  been  placed  under  the  con- 
trol of  the  Food  Administrator.  I  have  appointed  a  committee  to  determine 
a  fair  price  to  be  paid  in  government  purchases.  The  price  now  recommended 
by  that  committee  $2.20  per  bushel  at  Chicago  for  the  basic  grade  will  be 
rigidly  adhered  to  by  the  Food  Administration. 

Guaranteed  price  for  the  lois  wheat  crop. — As  already  stated, 
Congress  by  section  14  of  the  food  control  act  approved  August  10, 
1917,  gave  the  President  power  to  fix  reasonable  guaranteed  prices 
for  wheat  and  named  $2  per  bushel  at  the  principal  interior  primary 
markets  as  the  minimum  guaranteed  price  for  the  1918  crop.  The 
President,  acting  under  authority  of  the  above  act,  by  proclamation 
dated  February  21,  1918,  stated: 

I  do  hereby  determine  and  fix,  and  give  public  notice  of  reasonable  guar- 
anteed prices  for  No.  1  northern  spring  wheat  and  its  equivalent  at  the  re- 
spective principal  primary  markets, 

as  shown  in  the  following  table : 

Table  42. — Prices  of  wheat  guaranteed  bij  the  Government  for  the  1918  crop. 


Market. 


Chicago,  III 

Omaha,  Nebr 

Kansas  City,  Mo . . 

St.  Louis,  Mo 

Minneapolis,  Minn. 

Duluth,  Minn 

New  York,  N.  Y... 
Philadelphia,  Pa... 

Baltimore,  Md 

Newport  News,  Va 
Charleston,  S.  C.... 

Savannah,  Ga 

Portland,  Greg 


Price 

per 

bushel. 


$2.20 
2.15 
2.15 
2.18 
2.17 
2.17 
2. 28 
2.27 
2.27 
2.27 
2.27 
2.27 
2.05 


Market. 


Seattle,  Wash 

San  Francisco,  Calif. . 

Los  Angeles,  Calif 

Galveston,  Tex 

New  Orleans,  La 

Salt  Lake  City,  Utah. 

Great  Falls,  Mont 

Spokane,  Wash 

Pocatello,  Idaho 

Fort  Worth,  Te.x 

Oklahoma  City,  Okla 
Wichita,  Kaus 


Price 

per 

bushel. 


$2.05 
2.10 
2.10 
2.20 
2.20 
2.00 
2.00 
2.00 
2.00 
2.09 
2.05 
2.08 


The  above  prices  apply  to  No.  1  northern  spring.  No.  1  hard 
winter.  No.  1  red  Avinter,  No.  1  durum,  and  No.  1  hard  white  wheat. 
The  prices  of  other  grades  of  wheat  which  were  established  under  the 
United  States  grain  standard  act  of  August  11,  1916,  were  "  based  on 
the  above  guaranteed  prices."  This  proclamation  simply  continued 
for  another  year  the  prices  established  for  the  1917  crop. 

In  June,  1918,  the  railroads  were  granted  a  general  advance  in 
freight  rates  of  25  per  cent,  and  the  President  issued  an  Executive 
order  June  30,  1918,  authorizing  the  Food  Administration  Grain 
Corporation  (.see  p.  98)  to  pay  "higher  prices  than  the  guaranteed 
basis  for  an}^  grade  of  wheat  in  any  given  market.''  Acting  on 
this  authority  the  Food  Administration  issued  new  prices  etfective 


98 


METHODS   AND   OPERATTON.S   OF   EXPORTERS. 


July  1,  1918,  which  were  intended  "  as  nearly  as  possible  to  com- 
pensate for  increases  in  railway  and  sea  freights."  The  new  prices 
for  No.  1  northern  sprinf^,  No.  1  hard  winter,  No.  1  red  winter,  and 
iNo.  1  durum  wheat  at  the  principal  markets  are  shown  in  the  fol- 
lowing: table : 


Table    43. — Prices    of    wheat,    guaranteed    by    the    Government,    hy    principal 
markets,  effective  July  1,  1918. 


Market. 

Price 

per 

bushel. 

Market. 

Price 

per 

bushel. 

New  York 

$2. 395 
2.39 
2.  .3875 
2. 3S75 
2.225 
2.215 
2.26 
2.24 
2.18 

Omaha 

12.18 

Philadelphia 

2.28 

Baltimore 

Galveston. 

2  28 

Newport  News 

2.20 

Duhith 

Seattle.. 

2  20 

Minneapolis 

2  20 

Chicago 

2.20 

St.  Louis 

2.20 

Kansas  City 

2.20 

The  basis  for  No.  2  wheat  was  3  cents  below  No.  1  and  the  basis 
for  No.  3  wheat  was  7  cents  below  No.  1.  Grades  below  No.  3  were 
dealt  in  on  sample. 

Prices  of  other  kinds  of  wheat  than  those  mentioned  above  Avere 
fixed  as  follows : 

Dark  hard  winter,  2  cents  above  hard  winter. 

Dark  northern  spring,  2  cents  above  northern  spring. 

Amber  durum.  2  cents  above  durum. 

Yellow  hard  winter,  2  cents  below  hard  winter. 

Red  spring,  5  cents  below  northern  spring. 

Red  walla,  7  cents  below  red  winter. 

Red  durum,  7  cents  below  durum. 

Soft  white,  2  cents  below  hard  white. 

White  club,  4  cents  below  hard  white. 

Intermountain  basis  f.  o.  b.  outgoing  cars,  $2  per  bushel. 

The  Food  Administration  Grain  Corporation  announced  that  it 
would  buy  wheat  on  the  above  fair  price  basis  at  the  principal  pri- 
mary markets  as  named.  It  was  also  announced  that  producers 
had  the  right  to  bill  their  wheat  to  the  Food  Administration  Grain 
Corporation  at  any  of  the  principal  primary  markets  named  above, 
and  wdien  the  wheat  was  unloaded  in  the  elevator  and  weight  and 
grade  returns  were  received  by  the  Food  Administration  Grain  Cor- 
poration, remittance  would  be  made  on  the  basis  of  the  Government 
price  less  1  per  cent  administration  charge  for  service. 

Guaranteed  price  for  the  loio  wheat  crop. — Acting  under  au- 
thority of  section  14  of  the  food  control  act  of  August  10,  1917,  the 
President  issued  a  proclamation  on  September  2,  1918,  fixing  the 
guaranteed  price  of  wheat  for  the  1919  crbp  "  for  No.  1  northern 
spring  and  its  equivalent  at  the  respective  principal  primary  mar- 
kets," as  shown  in  the  following  table : 


UNITED   STATES   GRAIX    COEPORATION. 


99 


Tahle  44. — Prices  of  iclieat  guaranteed   In/   the   Government  al   the  principal 
interiar  and  seaboard  markets  foi'  the  1919  crop. 


Market. 


Chicago,  111 

Omaha,  Nebr 

Kansas  City,  Mo.. 

St.  I.ouis,  Mo 

Minneapolis,  Minn, 

Duluth,  Minn , 

Nev.' York,  X.  Y... 
Philadelphia,  Pa... 

Baltimore,  Md 

Newport  News,  Va 
New  Orleans,  La. . . 


Price  per 
bushel. 


$2.26 
2.  IS 
2.18 
2.24 
2.21i 
2.  22i 
2.39i 
2.39" 
2. 38-J 
2.38f 
2.28 


Market. 


Galveston,  Tex , 

Los  Angeles.  Calif 

San  Francisco,  Calif. 

Portland,  Greg 

Astoria,  Oreg 

Tacoma,  Wash 

Seattle,  Wash 

Spokane,  Wash 

Salt  Lake  City,  Utah 

Pocatella,  Idaho 

Great  Falls,  Mont.... 


Price  per 
bushel. 


$2.28 
2.20 
2.20 
2.20 
2.20 
2.20 
2.20 
2.00 
2.00 
2.0O 
2.0O 


The  above  prices  were  made  the  guaranteed  prices  for  No.  1  north- 
em  spring,  No.  1  hard  winter.  No.  1  red  winter.  No.  1  durum,  and 
No.  1  hard  white.  "  The  guaranteed  prices  at  the  respective  prin- 
cipal primary  markets  aforesaid  of  all  other  grades  of  wheat  estab- 
lished under  the  United  States  grain  standards  act  approved  August 
11,  1916,  shall  be  based  on  the  above  guaranteed  prices  and  bear  just 
relation  thereto."  These  prices  were  guaranteed  to  any  producer  of 
wheat  of  any  grade  "  upon  the  condition  that  said  wheat  is  harvested 
in  the  United  States  during  the  year  1919.  and  offered  for  sale  before 
June  1, 1920,  to  such  agent  or  emploj^ee  of  the  United  States,  or  other 
person  as  may  be  hereafter  designated,  at  any  one  of  the  above  men- 
tioned cities  "  and  provided  the  producer  complied  with  all  regula- 
tions in  regard  to  the  wheat  guaranty. 

The  guaranteed  price  at  Galveston  and  New  Orleans  was  increased 
from  $2.28  to  S2.30  per  bushel  by  Executive  order  on  June  25,  1919, 
effective  July  1,  1919. 

Zones  axd  agexcies. — To  facilitate  the  operations  of  the  Food  Ad- 
ministration Grain  Corporation,  the  United  States  was  divided  into 
14  zones  centering  about  geographicallj^  and  commercially  terminal 
markets.  Each  zone  out.side  of  New  York  was  under  the  super- 
vision of  a  second  vice  president  of  the  organization  who  was  respon- 
sible for  the  administration  of  the  corporation  in  his  particular  zone. 
The  location  of  the  agencies  and  the  territory  covered  by  each  zone 
were  as  follows: 

Table  45. — Location  of  offices  and  territory  included  in  the  zones  of  the  Food 
Administration  Grain  Corporation. 


Zone. 


New  York,  head  ofRce. 
St.  Louis,  Mo 


Portland,  Oreg 

New  Orleans,  La.. 
Philadelphia,  Pa... 

Duluth,  Minn 

Minneapolis,  Minn. 

Baltimore,  Md , 

Chicago,  111 


Buffalo,  N.Y 

San  Francisco,  Calif. 
Kansas  City,  Mo 


Omaha,  Nebr... 
Galveston.  Tex. 


Territory  covered. 


Greater  New  York,  Connecticut,  Maine,  Massachusetts,  New  Hampshire, 
Rhode  Island,  and  Vermont. 

Louisiana,  Mississippi,  Arkansas,  Alabama,  Florida,  Georgia.  Missouri 
(except  Jackson  and  Buchanan  Counties),  Kentuckv,  North  Carolina, 
South  Carolina.  Tennessee,  and  Illinois  (south  of  boundary  line  indicated 
under  Chicago). 

Idaho,  Oregon,  and  Washington. 

New  Orleans  only. 

Michigan  (lower  peninsula),  Indiana,  Ohio,  Pcnnsylvania.and  New  Jersey. 

Douglas  County,  Wis.,  and  terminal  elevators  in  Duluth,  Minn. 

Minnesota,  Montana,  Wyoming,  North  Dakota,  South  Dakota,  and  Iowa. 

Maryland,  Virginia,  West  Virginia,  District  of  Columbia,  and  Delaware. 

Illinois  (north  ofand  including  the  counties  of  .\dams.  Brown,  Cass.  Menow, 
Logan,  Macon,  Pratt,  Champaign,  Vermilion),  Michigan  (upper  penin- 
sula), Wisconsin  (except  Douglas  County),  and  Iowa. 

New  York  (except  Greater  New  York  City). 

California,  Nevada,  and  Arizona. 

Colorado,  Kansas.  Utah,  Oklahoma,  Texas,  New  Mexico,  and  Buchanan 
and  Jackson  Counties,  Mo. 

Nebraska. 

Galveston  only. 


106205°— 22- 


-9 


100  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

In  addition  to  the  above,  the  following  subterminal  markets  were 
established : 

Newport  News,  Va Subterminal  under  Baltimore  with  same  prices. 

Milwaukee,  Wis Subterminal  under  Chicago  with  same  prices. 

Seattle,   Wash Subterminal  under  Portland  with  same  prices. 

Los  Angeles,  Calif Subterminal  under  San  Francisco  with  same  prices. 

Each  agency  was  operated  as  a  unit  in  buying  and  purchasing 
grain  and  grain  j^roducts,  but  made  a  daily  report  of  all  transac- 
tions to  the  head  office  in  New  York  City. 

Section  4.  Organization  and  capitalization. 

Organization  of  Grain  Corporation. — The  food-control  act  of 
August  10,  1917,  authorized  the  President  to  purchase  from  time  to 
time,  to  store,  and  to  sell  for  cash  at  reasonable  prices,  wheat,  flour, 
meal,  beans,  and  potatoes.  And  in  order  to  protect  the  Government 
against  material  enhancement  of  its  liabilities  arising  out  of  any 
guaranty,  the  President  was  authorized  to  purchase  and  sell  any 
wheat  for  which  a  guaranteed  price  was  fixed.  In  order  to  facili- 
tate the  exercise  of  the  authority  thus  granted  and  "  to  enable  the 
United  States  Food  Administration  to  purchase  and  sell  such  com- 
modities in  the  manner  and  by  the  methods  customarily  followed  in 
the  trade,"  the  President  issued  an  Executive  order  on  AugTist  14, 
1917,  directing  the  Food  Administration  to  cause  a  corporation  to 
be  created  under  the  laws  of  Delaware  to  be  named  the  Food  Admin- 
istration Grain  Corporation. 

The  board  of  directors  consisted  of  seven  members,  four  of  whom 
were  named  in  the  Executive  order  directing  that  the  corporation 
be  created.  The  remaining  three  were  to  be  "  named  by  the  incorpo- 
rators subject  to  change  by  and  with  the  approval  of  the  Presi- 
dent." The  officers  consisted  of  a  president,  vice  president,  secre- 
tary, treasurer,  and  13  second  vice  presidents.  Each  of  the  second 
vice  presidents  represented  the  corporation  in  one  of  the  14  zones 
into  which  the  United  States  was  divided,  for  the  purpose  of  admin- 
istering the  activities  of  the  corporation. 

The  Food  Administration  Grain  Corporation  was  under  the  direct 
control  of  the  United  States  Food  Administrator,  who  held  and 
voted  all  of  the  capital  stock  of  the  corporation  until  June  30,  1919, 
when  control  of  the  corporation  was  transferred  to  the  United  States 
Wheat  Director.  The  position  of  Wheat  Director  was  created  by  an 
Executive  order  of  May  14,  1919.  The  Wheat  Director  was  vested 
with  the  executive  administration  of  the  laws  "  in  so  far  as  they 
apply  to  the  wheat  and  its  products  of  the  crop  of  1919  and  the 
guarantees  made  to  producers  thereof  and  the  protection  of  the 
United  States  against  undue  enhancement  of  its  liabilities  there- 
under." The  Wheat  Director  simply  took  over  the  activities  relating 
to  wheat  and  wheat  products  formerly  exercised  by  the  Food  Aduiin- 
istration,  which  was  preparing  to  wind  up  its  affairs  by  June  30, 
1919. 

The  Food  Administration  Grain  Corporation  was  directed,  by 
Executive  order  of  May  14,  1919,  to  close  its  books  as  of  June  30, 
1919,  and  change  its  name  to  United  States  Grain  Corporation,  here- 
after referred  to  as  the  Grain  Corporation.  All  of  the  capital 
stock    of    the    Grain    Corporation    was    held    by    the    Wheat    Di- 


UNITED  STATES   GRAIN   CORPORATION.  101 

rector  in  the  name  of  and  for  the  use  and  benefit  of  the  United 
States.  The  Grain  Corporation  was  authorized  to  purchase  and  sell 
wheat  of  the  crop  of  1918  after  June  1.  1919,  previous  authority 
having  expired  on  that  date,  and  to  purchase  wheat  and  flour  pro- 
duced from  wheat  of  the  1919  crop  "  at  the  places  designated  for  the 
delivery  of  the  same  by  the  President's  proclamation  "  of  Septem- 
ber 2,  1918,  and  "  at  such  other  places  as  the  Wheat  Director  may 
designate  for  cash  or  on  credit  at  the  guaranteed  prices  or  at  such 
other  prices  and  on  such  other  terms  as  the  "Wheat  Director  may 
direct." 

Capitalization  of  Grain  Corporation. — The  food-control  act  of 
August  10,  1917.  appropriated  $150,000,000  for  the  purpose  of  car- 
rying out  the  provisions  of  the  act  relating  to  purchase  and  sale  of 
the  products  named  by  the  President.  The  Executive  order  direct- 
ing that  the  corporation  be  created,  pro^Hided  that  the  capital  stock 
should  be  $50,000,000,  and  directed  the  United  States  Food  Adminis- 
trator to  "  subscribe  for  and  purchase  all  of  said  capital  stock  in  the 
name  of  and  for  the  use  and  benefit  of  the  United  States  and  as 
purchased  to  pay  for  the  same  out  of  the  appropriation  of  $150,000,000 
authorized  "  by  the  food-control  act. 

The  President,  by  Executive  order  of  June  21,  1918,  directed  that 
the  capital  stock  be  increased  to  $150,000,000  and  that  the  Food 
Administrator  purchase  the  additional  capital  stock  and  hold  it  for 
the  United  States  and  pay  for  it  out  of  the  appropriation  of  the 
$150,000,000  referred  to  above.  The  Grain  Corporation  was  also 
authorized  to  "  borrow  such  sums  of  money  upon  the  security  of 
wheat  or  flour  owned  by  it,  as  may  be  required  to  carry  out  the  pro- 
visions of  this  order."  Outside  borrowing  constituted  the  principal 
source  of  capital  during  tlie  1918  crop  year,  and  at  one  time  these 
borrowings  amounted  to  $385,000,000.  This  condition  is  not  reflected 
in  the  balance  sheets  given  below,  for  the  reason  that  they  are  taken 
at  the  close  of  the  wheat  year. 

The  act  of  March  4,  1919,  appropriated  $1,000,000,000  to  enable  the 
President  to  carry  out  the  price  guaranty  made  to  producers  of 
wheat  for  the  1919  crop  and  to  protect  the  Government  against  loss 
resulting  from  such  guaranty.  The  Executive  order  of  May  14, 
1919,  transferring  control  of  the  Grain  Corporation  to  the  United 
States  Wheat  Director,  provided  that  the  capital  stock  shoukl  be  in- 
creased to  $500,000,000  and  that  the  Wheat  Director  should  sub- 
scribe for  and  purchase  the  "  additional  capital  stock  in  the  name  of 
and  for  the  use  and  benefit  of  the  United  States  and  to  pay  for  the 
same  out  of  the  appropriation  of  one  billion  dollars,"  referred  to 
above.  This  increase  of  $350,000,000  was  made  subsequent  to  June 
30,  1919,  and  it*  was  retired  in  June,  1920,  pursuant  to  Executive 
order  of  June  26,  1920,  which  directed  that  the  United  States 
Grain  Corporation  reduce  its  outstanding  capital  from  $500,000,000  to 
$150,000,000.  The  capital  stock  was  further  reduced  from  $150,000,000 
to  $50,000,000  by  Executive  order  of  August  18,  1920.  This  latter 
amount  is  still  on  the  books  of  the  corporatir-^^ 

Section  5.  Extent  and  magnitude  of  operations. 

Purchases  and  sales. — The  Food  Administration  Grain  Corpora- 
tion was  made  the  sole  agency  for  the  purchase  and  sale  of  all  com- 


102 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


modities  dealt  in  by  the  Government  in  the  administration  of  the 
food-control  laws.  Most  of  its  transactions  were  in  <i:rain  and  grain 
products,  especially  wheat,  corn,  oats,  barley,  rye,  flour,  and  cereal 
l)roducts.  It  also  purchased  large  quantities  of  other  food  prod- 
ucts for  the  allied  (governments  and  various  relief  organizations. 

The  grains  and  grain  products,  other  than  wheat  and  flour,  were 
purchased  and  sold  extensively  up  until  June  30,  1919,  after  which 
dealings  in  grain  and  grain  products,  except  for  the  disposition  of 
products  on  hand,  were  confined  to  wheat  and  flour.  The  grains, 
other  than  wheat,  were  practically  all  purchased  and  sold  through 
the  coarse-grain  department. 

The  following  table  shows  the  quantity  of  grains,  other  than  wheat, 
sold  and  the  gross  amount  and  average  price  received. 


Table  46. — Sales  of  barley,  corn,  oats,  and  rye  by  the  course-grain  department 
of  the  United  States  Grain  Corporation,  1918  and  1919. 

Year  ended  June  30,  1918. 

Year  ended  June  30, 1919. 

Product. 

Bushels. 

Amount.          ^,^^^3, 

Bushels. 

Amount. 

Per 
bushel. 

Barley 

10,585,671 

2, 153, 093 

21,004 

25, 500, 093 

314,071,318.38 

3, 332, 946. 15 

20, 972. 06 

54, 754, 972. 27 

$1.33 

2,720,330 

$3,780,978.55 

SI.  40 

Corn 

1.55 
1.00 
1.92 

Oats 

Rye 

649, 733 

1, 276, 867. 71 

1  97 

Wheat  and  wheat  flour. — A  very  important  function  of  the 
United  States  Grain  Corporation  was  that  of  maintaining  the  es- 
tablished prices  of  wheat.  It  was  made  the  agent  of  the  Government 
in  maintaining  the  "  fair  price  "  fixed  by  the  President  for  the  1917 
wheat  crop,  and  was  designated  by  the  President  "  as  the  agency  of 
the  United  States  to  carry  out  and  make  effective  "  the  provisions 
of  the  laws  and  executive  orders  guaranteeing  the  price  of  wheat  to 
producers  of  the  1918  and  1919  Avheat  crops.  In  attempting  to  main- 
tain the  established  prices  and  to  protect  the  Government  from  loss 
growing  out  of  the  guaranties,  the  Grain  Corporation  performed 
three  functions:  (1)  Purchasing  and  selling  wheat  and  flour;  (2) 
entering  into  voluntary  agreements  with  elevators,  grain  dealers, 
and  millers  in  regard  to  prices;  and  (3)  issuing  licenses  to  elevators, 
dealers,  and  millers  under  authority  of  the  food  control  and  price 
guaranty  laws. 

Purchase  and  sale  of  wheat. — Soon  after  its  organization  the 
Grain  Corporation  announced  that  it  stood  ready  to  buy  the  entire 
wheat  crop  if  necessary  to  protect  the  established  price.  However, 
the  voluntary  agreements  and  the  rigid  enforcement  of  the  regula- 
tions under  which  licenses  were  granted  made  it  unnecessary  to  en- 
gage extensively  in  the  purchase  of  wheat  during  the  1917  crop  year. 
It  purchased  only  about  28,000,000  bushels  of  the  1917  wheat  crop. 
Beginning  with  July,  1918,  the  Grain  Corporation  acted  as  the  Gov- 
ernment agent  for  carrjnng  out  the  guaranteed  price  to  wheat  grow- 
ers. The  license  regulations  were  not  so  rigidly  enforced  and  the 
markets  were  opened  for  more  competitive  buying.  Farmers  were 
told  that  "  at  all  the  principal  primary  markets  there  is  an  open 


UNITED   STATES   GRAIISr   CORPORATION. 


103 


market  where  all  classes  of  buyers  are  well  represented,  and  the 
producer  and  the  consumer  will  be  amply  protected  throufjh  the  com- 
petitive actiA'ities  of  the  several  interests,  the  Grain  Corporation 
being  prepared  to  buy  and  protect  the  guaranteed  price."  The  Grain 
Corporation  was  very  active  in  the  purchase  and  sale  of  wheat  dur- 
ing the  1918  crop  year,  selling  approximately  260,000,000  bushels, 
including  Canadian  and  Australian  wheat,  from  July  1,  1918,  to  June 
30,  1919.  P"or  the  year  ending  June  30,  1920.  the  last  six  months  of 
which  it  was  not  a  very  active  purchaser,  the  Grain  Corporation  sold 
more  than  140,000,000  bushels.  The  sales  after  June  1,  1920.  the 
date  for  the  guaranteed  price  having  expired,  were  limited  to  the 
quantity  on  hand  on  that  date,  which  was  7,197.133  bushels. 

Wheat  sold  for  export. — The  greater  part  of  wheat  purchased  by 
the  Grain  Corporation  was  sold  for  export,  principally  to  agents  of 
the  allied  and  neutral  Governments,  or  directly  to  neutral  Govern- 
ments. The  Wheat  Export  Co.  was  the  largest  purchaser.  The 
following  table  shows  the  wheat  sold  by  the  United  States  Grain 
Corporation  for  export,  by  months,  from  July  1,  1918,  to  September. 
1920 : 


Table  47. 


-Quantity  and  value  of  wheat  sold  by  the  United  States  Grain  Cor- 
poration for  export,  Juljj,  1918,  to  September,  1920. 


Date. 

Bushels. 

Amount. 

Average 
price  per 
bushcU 

1918. 
Julv 

211,277 
19,823,693 
22,416,692 
21,650,362 
15, 556, 727 
27,074,430 

8,801,994 
6,386,189 
9,552,3.37 
14,297,315 
15,15.5,918 
12,504,487 

$500,293.26 
46.909,319.35 
53,409,428.75 
51, 825, 139. 18 
37,808,49.5.26 
66,748,267.68 

21,942,647.32 
15,822,902.22 
23,797,680.12 
35, 738,  853.  82 
37,740,772.53 
30,960,463.87 

$2  368 

2.366 

September 

2  383 

October 

2.394 

2.430 

2.465 

1919. 

2.493 

2.478 

March 

2.491 

2.500 

May 

2.490 

2.476 

Total 

173,431,421 

423,204,269.36 

2.440 

1919. 
July 

.5,972,739 
16,249,775 
22,694,281 

8,783,356 
13,638,534 

9,450,646 

6, 177, 257 
2,5a8,772 
3,464,399 
2,201,348 
1,655,6.58 
1,464,175 

14,841,418.82 
38,615,102.81 
53,967,186.89 
20,682,145.17 
32,338,019.19 
22,600,467.01 

14,818,103.53 
6,090,445.30 
8,418,305.17 
5,557,957.45 
4,137,900.55 
3,761,904.50 

2.484 

2.376 

2.378 

October     .    .                       .                 

2.354 

November 

2.371 

2.391 

1920. 

2.399 

February 

2.428 

2.430 

April 

2.  .524 

Mav 

2.499 

June 

2.569 

Total 

94,260,940 

225, 829, 016. 39 

2,396 

1920. 
July 

2,622,043 
954,326 
34,816 

6,920,021.99 

3,280,788.31 

95,  .573. 84 

2.639 

August 

September 

3.438 
2.745 

Total 

3,611,185 

10,296.384.14 

2.851 

104  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

All  of  the  wheat  sold  by  the  Grain  Corporation  for  export  was 
sold  f.  o.  b.  steamer,  port  of  shipment.  The  information  presented 
in  the  above  table  was  obtained  directly  from  the  sales  invoices  by 
examiners  of  the  commission.  For  tlie  year  ending  June  30,  1919, 
(he  sales  of  the  Grain  Corporation  rej^resented  approximately  97 
per  cent  of  all  wheat  exports  from  the  United  States,  and  in  the  fol- 
lowing year  al)Out  77  per  cent  of  the  total  exports.  As  already 
stated,  these  sales  were  made  largely  to  the  Wheat  Export  Co.,  the 
principal  purchaser  of  wheat  for  the  allied  and  neutral  governments, 
and  to  the  principal  relief  organizations. 

Country  elevator  agreements. — The  chief  provisions  of  the  volun- 
tary agreement  between  the  Grain  Corporation  and  the  elevator  pro- 
prietors under  the  Food  Administration  in  1917  and  1918  were  (1) 
the  proprietor  granted  to  the  Grain  Corporation  the  right  to  direct 
the  retention  in  the  elevator  of  any  wheat  owned  by  the  proprietor 
and  to  direct  shipment  and  delivery  of  same;  (2)  the  Grain  Corpora- 
tion agreed  to  pay  the  proprietor  one-fifteenth  of  a  cent  per  bushel 
per  day  as  storage,  insurance,  and  interest  for  all  wheat  so  detained; 
(3)  the  proprietor  granted  the  Grain  Corporation  the  right  to  en- 
gage and  reserve  any  empty  space  in  the  elevator  for  its  own  use,  the 
corporation  agreeing  to  pay  the  proprietor  a  fair  rate  of  storage, 
and  as  actual  grain  accumulated  in  such  space  one-fifteenth  of  a  cent 
per  bushel  per  day  to  cover  storage,  insurance,  and  interest;  (4)  the 
Grain  Corporation  guaranteed  the  proprietor  against  any  decline 
in  the  Government  price  basis  of  wheat. 

The  agreements  between  the  Grain  Corporation  and  the  country 
elevators  and  brokers  under  the  W'^heat  Director  in  1919  and  1920 
contained  the  following  provisions:  (1)  The  dealer  agreed,  when 
buying  from  the  producer,  to  "  pay  not  less  than  the  guaranteed 
price"  less  freight  and  less  a  reasonable  handling  margin;  (2)  the 
Grain  Corporation  agreed  to  purchase  at  the  guaranteed  price  at  any 
time  during  the  life  of  the  agreement  upon  request  of  the  dealer  "  all 
or  any  part  of  the  unsold  wheat  owned  by  the  dealer  " ;  (3)  the  Grain 
Corporation  agreed  to  pay  the  dealer  seven-twentieths  of  a  cent  per 
bushel  per  week  to  cover  insurance  and  interest  on  the  wheat  owned 
by  the  dealer  in  the  elevator  at  the  beginning  of  the  week,  in  case 
the  dealer  was  unable  "  after  using  every  effort  and  all  diligence  " 
to  sell  a  quantity  of  all  grain  equal  to  at  least  20  per  cent  of  such 
wheat  during  the  week;  (4)  the  Grain  Corporation  agreed  to  pur- 
chase, at  the  request  of  the  dealer,  all  or  any  part  of  the  wheat  on 
hand  on  the  date  of  the  termination  of  the  agreement  at  tlie  guar- 
anteed price;  (5)  the  dealer  was  not  entitled  to  any  of  the  benefits 
of  the  agreement  unless  he  held  such  license  as  miglit  be  required  by 
proclamation  of  the  President  pursuant  to  laws  relating  to  the  guar- 
anteed prices  of  wheat.  These  agreements  were  in  effect  until  May 
31,  1920.  About  14,000  elevators  signed  the  agreement  in  effect  dur- 
ing 1917  and  1918  crop  years,  while  16,187  elevators  signed  agree- 
ments during  the  1919  crop  year. 

Elevator's  license, — The  regulations  under  which  licenses  were  is- 
sued to  elevators  covered  substantially  the  same  provisions  as  the 
voluntary  agreements  with  the  additional  provisions  (1)  that  no 
wheat  or  rye  should  be  received  for  storage  by  any  licensee  for  a 


UNITED   STATES   GRAIN"   CORPORATION. 


105 


longer  period  than  30  da^'S,  except  for  the  United  States  Governirent 
without  the  consent  of  the  Food  Administrator;  and  (2)  no  licensee 
could  "  sell  wheat  at  a  margin  of  profit  greater  than  that  charged  by 
other  dealers  in  the  same  locality  who  adhere  to  the  basic  prices 
fixed  for  government  purchases  in  making  their  purchases  and  sales 
of  wheat."    On  June  1,  1920,  21,490  elevator  licenses  were  in  effect, 

European  relief  appropriation. — The  Grain  Corporation  was 
designated  by  the  President  as  the  fiscal  agent  of  the  American  Re- 
lief Administration  by  an  Executive  order  issued  February  24,  1919, 
in  pursuance  of  an  act  of  the  same  date  appropriating  $i00,000.000 
to  be  used  as  a  revolving  fund  until  June  30,  1919,  for  the  relief  of 
European  populations.  The  act  provided  "  that  so  far  as  said  fund 
shall  be  expended  for  the  purchase  of  wheat  to  be  donated  prefer- 
ence shall  be  given  to  grain  grown  in  the  United  States.  "* 

Russian  relief  fund. — Pursuant  to  an  act  of  Congress  approved 
December  22,  1921.  appropriating  $20,000,000  "  for  the  relief  of  the 
distressed  and  starving  people  of  Russia,"  the  President  issued  an 
Executive  order  on  December  24,  1921,  appointing  a  "  purchasing- 
commission  for  Russian  relief."  The  Executive  order  designated  the 
United  States  Grain  Corporation  "  as  the  fiscal  agent  of  said  com- 
mission," and  directed  it  "  to  pay  out  of  its  available  funds  all 
bills  and  obligations  incurred,  but  all  under  the  direction  of  said 
commission,"  a  sum  not  to  exceed  $20,000,000.  The  Grain  Corpora- 
tion is  required  to  render  to  the  President  "  not  later  than  the  15th 
day  of  December,  1922.  an  itemized  and  detailed  report  of  the  ex- 
penditures incurred  by  it." 

Purchase  and  sale  or  wheat  flour. — The  Grain  Corporation 
was  a  large  purchaser  of  wheat  flour.  It  purchased  flour  for  the 
United  States  Army,  the  Allies,  neutral  European  Governments,  and 
the  various  relief  organizations.  Only  a  small  proportion  of  its 
sales  were  made  to  domestic  consumers.  The  following  table  shows 
the  distribution  of  purchases  of  wheat  flour  by  the  Grain  Corpora- 
tion compiled  by  A.  L.  Russell,  statistician  of  the  United  States  Food 
Administration : 

Table  48. — Quantity  of  wlieat  flour  sold  "by  the  Food  Administration  Grain  Cor- 
poration and  the  United  States  Grain  Corporation  by  fiscal  years  ending 
June  30,  1918-1920. 


Purchaser. 

1918 

1919 

1920 

Barrels. 

746, 510 
3,469,264 
18, 486, 043 

Barrels. 

Barrels. 
658, 721 

U.  S.  Armv 

4,025,508 
11, 774, 149 
10,132,539 

Allied  Governments 

3, 798, 430 

7, 823, 116 

Total 

22,701,817 

25,932,196 

12,280,267 

The  bulk  of  the  flour  purchased  and  sold  by  the  Grain  Corpora- 
tion was  handled  by  the  flour  department.  The  table  following 
shows  the  quantity  of  flour  sold  and  the  amount  and  monthly  average 
price  received  by  the  flour  department  of  the  Grain  Corporation. 


*110  Stat.,  pt.  1,  p.  1161. 


106 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


Table  'll>. 


Qnavtitu  and  nrt-HOlcH  ralnc  of  flour  sold  hy  the  flour  department 
of  the  Grain  Corporation,  July  1,  lOlS,  to  July  31,  1920. 


Date. 


Barrels. 


Average 

price  per 

barrel. 


1918. 

July 

August 

September 

October 

N  ovember 

December 

1919 

January 

February 

March 

April 

May 

June 

Fiscal  year 

1919, 

July 

August 

September 

October 

November 

December 

1920 

January 

February 

March 

April 

May 

June 

P'iscal  year 

July 


2, 494, 104 
1,602,999 
l,02r),:m 
l,42r),09.5 
l,6r>4, 10(> 
2,670,595 


3, 109, 816 
1,. 560, 305 
1, 786, 2.57 
1,350,1.30 
2,906,402 
2,541,135 


$27,1&3,316.06 
17,728,86:1.90 
11,2.')7,886.()9 
1.5,778,210.69 
18,217,071.19 
29,936,373.39 


3.5, 677, 46."..  32 
18,422,269.79 
21,312,908.  .52 
15,394,937.75 
32,944,674.48 
29.188,372.74 


24,206,337 


273,042,347.92 


1,346,607 
921,060 

1,135,117 
584, 804 
786,956 
677, 162 


1,043,790 
732,897 
1,517,292 
1, 196, 632 
1,731,579 
1, 279, 691 


14, 361, 533. 47 
10,039,003.30 
11, 776,  .532.  .58 
6, 160, 742. 09 
8,246,434.45 
6,787,711.24 


11,0.53,6.58.59 
7, 719, 435. 61 
16,13.5,017.37 
12,721,053.57 
16, 857, 623. 71 
13, 538, 403. 34 


12,953,587 


135,397,149.32 


$10.90 
11.06 
10.98 
11.07 
10.95 
11.21 


11.26 
11.81 
11.93 
11.32 
11.32 
11.49 


11.28 


10.67 
10.90 
10.38 
10.54 
10.48 
10.02 


10.  .59 
10.53 
10.63 
10.63 
9.75 
10.58 


10.45 


1,046,318 


11,085,544.43 


For  the  fiscal  year  ending  June  30,  1919,  all  of  the  sales  of  flour 
were  for  export,  while  in  the  following  year  all  but  about  650,000 
barrels  were  sold  for  export.  The  quantity  of  flour  sold  for  export 
by  the  Grain  Corporation,  as  shown  above,  for  the  year  ending 
June  30,  1919,  is  slightly  larger  than  the  total  quantity  reported  by 
the  United  States  Bureau  of  Foreign  and  Domestic  Commerce.  The 
small  discrepancy  is  due  to  the  difference  in  the  date  for  particular 
sales  appearing  on  the  sales  invoices  of  the  Grain  Corporation  and 
the  date  as  shown  by  the  export  declaration.  In  the  following  year 
export  restrictions  with  reference  to  flour  were  removed  and  the 
Grain  Corporation  sales  for  export  were  slightly  less  than  half  the 
total.  During  the  fiscal  year  ending  June  30,  1919,  the  quantity 
of  flour  sold  for  export  by  the  Grain  Corporation  was  equivalent  to 
about  116,200,000  bushels  of  wheat,  and  in  the  next  year  to  approxi- 
mately 52,300,000  bushels. 

Millers'  voluntary  agreement. — Immediately  following  its  or- 
ganization in  August,  1917,  the  Grain  Corporation  entered  into  a 
series  of  agreements  with  millers  and  country  elevators  to  main- 
tain the  Government  price  basis  in  their  purchases  during  the  1917 
crop  year.  The  chief  provisions  of  the  millers'  agreements  were  (1) 
the  mills  were  not  to  pay  a  higher  price  for  wheat  than  the  Govern- 
ment fair  price;  (2)  the  Grain  Corporation  guaranteed  the  mills 
against  loss  by  decline  in  the  price  of  wheat  below  the  fair  price 


UNITED   STATES   GRAIN    CORPORATION.  107 

basis  or  against  a  decline  in  the  price  of  flour  during  the  life  of  the 
agreement,  the  millers  paying  the  Grain  Corporation  a  sum  equal  to 
1  per  cent  of  the  amount  paid  for  wheat  purchased  and  ground  in 
the  mill;  (3)  the  Grain  Corporation  agreed  to  maintain  an  equitable 
distribution  of  the  available  wheat  between  the  mills  on  a  pro  rata 
basis,  each  mill  to  receive  the  same  proportion  of  the  total  that  its 
average  grind  for  the  three  years  1914^1916  bore  to  the  total  average 
grind  of  all  mills  during  that  period;  (4)  the  millers  agreed  to  oper- 
ate their  mills  at  a  profit  of  not  more  than  25  cents  per  barrel  on 
flour  and  50  cents  per  ton  on  feed;  (5)  the  millers  agreed  not  to  store 
wheat  for  more  than  30  days'  supply  without  permission  of  the 
Food  Administration:  (6)  millers  agreed  not  to  contract  for  the  sale 
of  flour  more  than  30  days  in  advance;  and  (7)  the  Grain  Corpora- 
tion agreed  to  apportion  all  export  sales  of  flour  over  the  entire  mill- 
ing industry.  About  3,300  millers  signed  this  agreement  with  the 
Food  Administration  during  1917  and  1918,  while  4,014  millers 
signed  similar  agreements  with  the  Wheat  Director  during  1919  and 
]920. 

Millers'  license. — The  millers  who  did  not  sign  the  agreement, 
although  at  liberty  to  purchase  wheat  at  higher  prices,  were  effec- 
tively held  to  the  fair  price  basis  by  the  terms  of  the  license  required 
by  the  Executive  order  of  August  14,  1917.  This  order  was  issued 
under  authority  granted  the  President  by  the  food  control  law  and 
required  all  persons,  firms,  corporations,  etc.,  manufacturing  any 
products  derived  from  wheat  or  rye,  except  mills  with  a  daily 
capacity  of  100  barrels  or  less,  and  farmers  and  cooperative  associa- 
tions of  farmers  to  secure  a  license  from  the  food  administrator  on 
or  before  September  1,  1917.  On  January  10,  1918,  the  size  limit 
was  reduced  to  75  barrels.  All  millers  were  ultimately  required  to 
take  out  licenses  to  operate.  The  regulations  under  which  licenses 
were  issued  to  millers  provided  that  (1)  the  mills  should  operate  at 
a  profit  not  exceeding  25  cents  per  barrel  on  flour  and  50  cents  per 
ton  on  feeds,  and  in  computing  cost,  if  any  licensee  paid  "  more  for 
wheat  than  the  customary  market  price  in  that  locality,  as  evidenced 
by  the  price  established  for  Government  purchases  at  the  nearest 
terminal  market  less  freight,  he  shall  not  be  permitted  to  charge  as 
cost  the  excess  over  such  market  price  ";  (2)  no  miller  could  ''  keep 
on  hand  or  have  in  possession  or  under  control  at  any  time  any 
greater  quantity  of  wheat,  rye,  or  flour,  in  the  aggregate."  than  the 
equivalent  of  the  output  of  the  plant  for  30  days,  without  the  consent 
of  the  Food  Administration;  (3)  no  miller  could  contract  for  the 
sslU  of  flour  for  more  than  30  days  in  advance,  except  "  with  the 
Federal  Government  or  with  the  Government  of  any  nation  at  war 
with  German3\" 

The  terms  of  the  voluntary  agreements  and  the  requirements  for 
securing  a  license  to  operate  were  substantially  the  same.  About 
7,000  millers  were  granted  licenses  to  operate  during  1917  and  1918. 
The  number  of  millers'  licenses  in  effect  on  June  1,  1920,  were  10,105. 

Section  6.  Financial  statements,  earnings,  and  margins. 

Balance  sheets. — The  balance  sheets  presented  in  this  re})ort 
were  prepared  and  submitted  by  the  corporation  and  were  not  veri- 
fied by  the  commission.     They  do  not  reflect  the  maximum  invest- 


108 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


ment  during  the  year.  During  the  1918  crop  year  the  corporation 
borrowed  large  sums  on  stocks  of  commodities  on  hand.  At  one 
time  such  borrowings  amounted,  as  already  stated,  to  $385,000,000, 
but  this  sum  was  largely  liquidated  before  June  30,  1919.  Pursuant 
to  Executive  order  of  May  14,  1919,  the  capital  stock  of  the  Grain 
Corporation  was  increased  to  $500,000,000,  which  gave  the  corpora- 
tion the  use  of  $350,000,000  additional  cash  during  the  1919  wheat 
crop  year.  This  extra  capital  stock  was  retired,  however,  by  Execu- 
tive order  of  June  26,  1920,  hence  it  is  not  reflected  in  the  balance 
sheet  of  June  30,  1920. 

The  following  table  shows  the  balance  sheets  foi-  the  fiscal  years 
ending  June  30,  1919  and  1920,  and  for  Februai-y  28,  1921. 

Table  50. — Balance  sheets  of  the  United  States  Grain  Corporation. 


Item. 


ASSETS. 


Cash 

Accounts  receivable 

Bills  receivable 

Inventories 

United  States  Government  bonds. 

Furniture  and  equipment 

Interest  in  suspense  on  flour  loans. 


Total. 


LIABILITIES. 

Accounts  payable 

Flour  loans 

Accruals 

Reserves: 

Marine  insurance 

Freight 

Contingency 

Transportation  of  German  gold . 

Overages 

Miscellaneous  list 

Capital  stock  issued 

Miscellaneous  income 

Surplus 


June  30,  1919.1 


?97, 9.52, 31.5. 31 

118,249,994.99 

15,000.00 

69,748,855.63 

137,700.00 

166, 598. 85 

4,881.49 


286,275,346.27 


65,688, 

77, 

6,944, 

401, 

1,243, 

28, 138, 


198.16 
214. 08 
548.49 

444.14 
898. 48 
975. 15 


10,137, 
150,000, 


104. 84 
000.00 


23,643,962.93 


Total 286,275,346.27 


June  30, 1920. 


$1.30,197,441.44 

36,285,190.87 

16,600,114.29 

29,419,647.80 

198,700.00 

128,598.08 


212,829,692.48 


Feb.  28,  1921. 


?43,821,360.08 

1,2.57,622.30 

56,899,879.09 


198,700.00 
46,712.74 


102,224,274.21 


4,398,087.28 

""985,"  069.' 57' 

369,951.58 

'2i,"i52,'369.'69" 


161,186.69 

150,000,000.00 

9, 345, 516. 63 

26,417,521.64 


212,829,692.48 


673,889.91 


486, 2.54. 94 
19,797.26 


50,000,000.00 
10,267,835.82 
40,776,496.28 


102,224,274.21 


^  Food  Administration  Grain  Corporation. 

As  already  stated,  the  Grain  Corporation  was  not  an  important 
factor  during  1920,  as  it  practically  closed  its  business  at  the  end  of 
May,  1920.  On  June  30,  1920,  its  inventories  amounted  to  about 
$29,420,000,  but  before  February  28,  1921,  all  inventories  had  been 
closed  out. 

Fluctuations  in  borrowed  funds. — The  balance  sheets  presented 
above  do  not  indicate  the  importance  of  the  borrowed  funds  used 
by  the  Grain  Corporation.  As  already  shown  in  the  preceding 
chapter,  there  is  a  wide  fluctuation  in  the  amount  of  money  required 
in  the  export  grain  business  at  different  periods  of  the  year,  and  as 
a  consequence  export  concerns  use  large  amounts  of  short-time  loans. 
The  books  of  the  Grain  Corporation  showed  as  wide  a  fluctuation  in 
the  amount  of  borrowed  money  used  in  different  months  as  was 
shown  for  private  companies.  The  following  table  shows  the  amount 
of  borrowed  money  at  the  end  of  each  month  from  July,  1918-June, 
1919: 


UNITED   STATES   GRAIN   CORPORATION. 


109 


Table  51. 


-Monthly  fluctnations  in  the  amount  of  Mils  payable  for  the  Grain 
Corporation,  July,  1918,  to  June,  1919. 


Date. 


Amount. 


Inde.x 
number. 


191S 

July 

August 

September , 

October , 

November 

December , 

1919 

January 

February 

March 

April , 

May 

June , 


$4,753,507.42 
4,737,218.74 

78, 182, 744. 14 
363, 877, 744. 14 
365, 127, 690. 14 
320, 247, 190. 14 


313, 204, 690. 14 
309, 188, 537. 06 
253, 229, 159.  23 
160,114,374.15 
106, 391, 471. 54 
77, 214. 08 


m 


1.3 
1.3 
21.4 
99.6 
100.0 
87.7 


85.8 
84.7 
69.4 
43.9 
29.1 


1  Less  than  one-tenth  of  1  per  cent. 

As  already  stated,  the  amounts  shown  above  are  for  the  end  of 
each  month.  The  amount  of  short-time  loans  increased  rapidly  from 
Juh'  to  the  end  of  November,  1918,  after  which  there  was  a  steady 
decline  until  the  end  of  the  fiscal  j-ear.  For  the  index  numbers 
November,  1918,  was  taken  as  100. 

During  the  fiscal  year  ending  June  30,  1919,  only  $150,000,000  was 
available  from  appropriations  for  the  use  of  the  Grain  Corpora- 
tion. This  amount  was  not  sufficient  to  finance  the  operations  of 
the  Grain  Corporation ;  consequently  the  amount  of  borrowed  money 
was  large,  particularly  in  the  months  of  heavy  purchases.  On 
March  4.  1919,  an  appropriation  of  $1,000,000,000  was  made  to 
finance  the  Grain  Corporation  in  carrying  out  the  price  guaranty 
for  the  1919  wheat  crop.  From  this  appropriation  the  Grain  Corpo- 
ration increased  its  capital  stock  to  $500,000,000,  thus  avoiding  the 
necessity  of  borrowing  during  the  year  ending  June  30,  1920. 

The  heaviest  borrowings  were  made  during  the  six  months  begin- 
ning with  October,  1918.  As  already  stated,  the  largest  amount 
borrowed  was  about  $385,000,000.  The  largest  amount  borrowed  at 
the  end  of  a  month  was  $365,127,000  on  November  30,  1918.  The 
marked  decline  in  the  amount  borrowed,  as  shown  for  June  30,  1919, 
was  due  to  the  fact  that  Congress  had  appropriated  $1,000,000,000 
for  the  use  of  the  Grain  Corporation,  which  was  available  July 
1,  1919. 

Income  statements. — The  Grain  Corporation  submitted  a  state- 
ment of  miscellaneous  income  for  the  Food  Administration  Grain 
Corporation  covering  the  period  of  its  operations  prior  to  June  30, 
1919,  a  period  of  about  21  months.  The  corporation  closed  its  books 
as  of  June  30,  1919.  at  which  time  it  changed  its  name  to  United 
States  Grain  Corporation.  The  corporation  also  submitted  state- 
ments o^  income  for  the  United  States  Grain  Corporation  for  the 
3^ear  ending  June  30,  1920,  and  accumulated  income  up  to  February 
28,  1921,  at  which  time  it  had  disposed  of  all  commodities  on  liand. 
The  income  statements  condensed  by  combining  departments  and 
agencies  are  shown  in  the  following  table : 


110 


METHODS   AND   OPERATIONS   OF   EXPOHrERS. 


Table  Zi2.— Earnings  from  the  operations  of  the  Food  Administration  Grain 
Corjioration  and  the  United  States  Grain  Corporalion,  September  J,  1917,  to 
February  28,  1921. 


Item. 


Sept.  1,  1917, 

to  June  :W, 

1919. 


July  1,  1919,  to 
June  30,  1920. 


July  1,  1919,  to 
Feb.  28,  1921. 


Wheat  settlement  with  Allies 

Interest  on  bank  balances 

Miscellaneous  interest  received 

Guaranty  and  operating  expense  fund . 

Miscellaneous  earnings 

Operating  income 


$7,078,115.40 

289, 657. 07 

548, 200.  02 

12,211,890.61 

55,111,485.81 


$1,905,600.42 

27,884.64 

7,496.56 

12,577,153.98 

3,310,968.28 


$2,084,817.77 

73,9.34.47 

7, 4%.  56 

13,285,921.44 

3,416,380.85 


Gross  income. 


75,239,416.11 


17, 835, 163. 88 


18,868,551.09 


Operating  e.xpense 

Handling  and  storage  i 

Country  storage 

Excess  wlieat  cost 

Miscellaneous  interests  paid . 
Interest  on  bills  payable 


3,400,918.33 
8, 517, 159.  74 


456, 169. 69 
11,082,230.27 


3, 210, 440.  26 

13, 2.53. 49 

3,436,011.23 

1,560,317.44 

2, 704. 36 

266, 920. 47 


3, 704, 771.  .56 

13,263.49 

3, 060, 757. 08 

1,555,002.67 


266, 920.  47 


Total  expense . 
Net  income 


23, 456, 478.  03 


8, 489, 647. 25 


8, 600, 715. 27 


51, 782, 938. 08 


9, 345, 516. 63 


10, 267, 835. 82 


1  Includes  insurance  on  reserve  wheat  stocks. 

The  net  income  of  the  Grain  Corporation  up  to  June  30,  1919, 
aggregated  $51,782,938.08.  Of  this  amount,  $28,138,975.15  was  set 
up  as  a  reserve  for  contingent  liabilities.  The  remaining  $23,643,- 
962.93  was  transferred  to  the  surplus  account.  Payments  were  made 
from  time  to  time  by  the  Grain  Corporation  from  the  reserve  for  con- 
tingent liabilities.  The  aggregate  amount  paid  out  of  this  fund  was 
$11,006,441.80.  The  remainder  having  been  transferred  to  surplus, 
there  were  $40,776,496.28  income  from  the  operations  of  the  Food 
Administration  Grain  Corporation  in  the  surplus  on  February  28, 
1921.  The  accumulated  net  income  of  the  corporation  from  date  of 
organization  to  February  28,  1921,  was  $51,044,332.10. 

Kate  or  earnings  on  investment. — On  account  of  the  wide  fluctu- 
ations in  the  amount  of  the  monthly  short-time  loans,  the  commission 
used  the  monthly  average  loans,  obtained  by  taking  one-twelfth  of 
the  sum  of  the  amount  outstanding  at  the  close  of  each  month  as  part 
of  the  investment.  The  mean  investment,  consisting  of  one-half  of 
the  sum  of  the  capital  stock  and  surplus  at  the  beginning  and  end 
of  the  year  and  the  monthly  average  short-time  loans,  the  earnings, 
including  interest  on  borrowed  funds,  and  the  rate  of  earnings  on 
investment  for  the  fiscal  years  ending  June  30,  1919  and  1920,  are 
shown  in  the  following  table: 


Table  53. 


-Investment,  earnings,  and  rate  of  earnings  on  investment  for  the 
two  fiscal  years  ending  June  SO,  1919  and  1920. 


Fiscal  year. 

Meaninvestment. 

Earnings. 

Rate. 

1919 

$369, 416, 046. 69 
504, 349, 172.  72 

$39,007,076.88 
9, 612, 437. 10 

Per  cent. 
10.55 

1920 

1.91 

436,882,609.71 

24, 309, 756. 99 

5.56 

UNITED   STATES   GRAIN   CORPORATION. 


Ill 


Tlie  rate  of  earnings  on  the  mean  investment  including  the  monthly 
average  short-time  loans  was  a  little  over  10^  per  cent  for  the  year 
ending  June  30,  1919,  and  only  about  1.9  per  cent  during  the  fiscal 
year  ending  June  30,  1920,  with  an  average  of  about  5J  per  cent 
for  the  two-year  period. 

Earnings  on  iroducts  sold, — For  the  purpose  of  this  report  it 
is  desirable  to  show  the  earnings  of  the  principal  grains  handled. 
In  order  to  present  such  earnings  the  expensfes  have  been  allocated 
to  the  different  commodities  on  the  basis  of  the  gross  earnings  shown 
for  each  product.  The  following  table  shows  the  gross  earnings, 
the  expenses  prorated  on  the  above  basis,  and  the  net  earnings  by 
commodities  for  the  period  1917  to  February  28,  1921. 

Table  54. — Gross  earninqs,  expenses,  net  earnings,  and  other  income  for  the 
Grain  Corporation,  September  1,  1917,  to  February  28,  1921. 


Item. 

Sept.  1,  1917,  to  June  30,  1919. 

Gross  earnings. 

Expenses. 

Net  earnings. 

Earnings  from: 

Wheat 

$18,258,1.54.58 

18,686,314.29 

1,170,730.16 

1,276,738.30 

32, 457. 39 

1,927,417.05 

1,366.83 

16,384,126.32 

$7, 417,  .59.5. 13 

7,591,548.37 

475,627.01 

518,69.3.10 

13, 182. 54 

783,024.15 

562.96 

6,656,244.77 

$10,840,559.45 

11,094,76,5.92 

695  103  15 

Flour 

Barley 

75S'045.20 
19  274.  85 

Corn '. 

Rye 

1  144  392  90 

Oats 

'803.87 

Other  commodities 

9,727,881.55 

Total 

34,280,826.89 

Other  earnings: 

Guaranty  and  operating  expense  fund 

12  211  896  61 

Excess  profits  collected  from  millers  (net) 

4, 452' 296.  29 
837  918  ''9 

Interest  received 

Total 

17,502,111.19 

Net  earnings 

1 

51,782,938.08 

1 

Item. 


Earnings  from: 

Wheat 

Flour 

Barley 

Cereal  products 

Corn 

Rye 

Oats 

Other  commodities . 


Total - 


Other  earnings: 

Guaranty  and  operating  expense  fund 

Excess  profits  collected  from  millers  (net). 
Interest  received 


Total 

Net  earnings. 


July  1,  1919,  to  Feb.  28,  1921. 


Gross  earnings.       Expenses.        Net  earnings 


$7,115,311.95 

1,829,017.34 

159,855.30 


275,549.46 


5,767,565.07 


$3,309,672.45 
S50, 750.  71 
74,384.06 


128,181.59 


2,682,723.79 


$3,805,639.50 

978,260.63 

8.5,471.74 


147,367.87 


51,841.28 


8,101,587.02 


7, 490.  56 


2,1,58,752.24 


2,106,248.80 


10,267,835.82 


112  METHODS   AND   OPERATIONS   OF   EXPORTERS. 

The  earnings  from  wheat  and  wheat  flour  were  larger  than  those 
for  any  other  product,  while  the  miscellaneous  earnings  from  corn 
and  oats  were  very  small.  The  relatively  large  earnings  from  wheat 
and  flour  were  due  to  the  large  volume  of  business  in  these  products 
as  compared  with  other  commodities.  As  already  stated,  the  Grain 
Corporation  closed  out  its  inventories  of  the  different  commodities 
between  June  30,  1920,  and  February  28,  1921. 

The  gross  earnings  in  the  above  tables  were  obtained  by  combining 
the  miscellaneous  earnings,  as  shown  on  the  books  of  the  corporation, 
on  each  product  in  all  departments  and  agencies  with  the  exception 
of  wheat.  The  item  under  "  wheat  settlement  with  the  allies  "  was 
added  to,  and  the  item  under  "  excess  wheat  cost  "  was  deducted  from 
the  earnings  on  wheat. 

In  arriving  at  the  net  earnings,  the  total  expenses,  including  inter- 
est paid,  are  deducted  from  gross  earnings  on  grain  and  other  com- 
modities. As  already  stated,  the  allocation  was  made  on  the  basis 
of  gross  earnings.  The  expenses  consisted  of  operating  expense  and 
handling  charges  and  storage,  both  of  which  apply  to  all  com- 
modities. Interest  paid,  which  amounted  to  nearly  eleven  and  a 
half  million  dollars  up  to  June  30,  1919,  was  practically  all  paid 
on  money  borrowed  on  wheat  and  flour  held  in  storage  under  author- 
ity of  Executive  order  of  June  21,  1918. 

The  amounts  to  offset  this  interest  were  included  in  the  price 
of  the  commodities  sold,  and  in  some  instances  separate  bills  were 
rendered  charging  the  purchaser  with  interest  on  reserve  wheat 
stock,  and  even  interest  on  "  idle  funds  "  covering  purchases  over  a 
certain  period,  to  offset  the  interest  paid  by  the  corporation.  In 
this  way  the  interest  paid  directly  influenced  the  earnings,  and  is 
properly  deducted  from  gross  earnings. 

The  handling  and  storage  charge,  however,  includes  amounts  paid 
to  grain  elevators,  under  contracts  relating  to  the  guaranteed  price 
of  wheat,  on  grains  which  were  never  handled  by  the  corporation; 
but  it  is  impossible  to  determine  how  much  of  this  should  be  charged 
to  the  guaranty  and  operating  expense  fund.  The  entire  item  was 
included  in  expenses  deducted  from  gross  earnings  on  commodities 
purchased  and  sold. 

Other  income  consisted  of  interest  received,  the  credit  balance  of 
the  guaranty  and  operating  expense  fund  account,  and  the  excess 
profiits  collected  from  millers.  None  of  these  items  resulted  di- 
rectly from  the  purchase  and  sale  of  commodities.  The  interest 
received  was  interest  on  bank  balances  and  bills  receivable.  The 
guaranty  and  operating  expense  fund  was  built  up  in  part,  at  least, 
from  items  collected  under  the  terms  of  voluntary  agreements  and 
license  regulations  incident  to  maintaining  the  guaranteed  prices  of 
wheat.  The  excess  profits  collected  by  the  corporation  from  millers 
consisted  of  their  profits  in  excess  of  25  cents  per  barrel  net  on  flour 
and  50  cents  per  ton  net  on  feed  manufactured.  (See  p.  107.)  The 
net  amount  of  excess  profits  collected  from  millers  up  to  June  30, 
1919,  and  included  in  the  income  statement  prepared  by  the  corpora- 
tion was  $4,452,296.29,  while  the  net  amount  so  collected  and 
paid  into  the  United  States  Treasury  on  August  25,  1920,  was 
$7,078,988.55. 


UNITED  STATES   GEAIlSr   CORPORATION. 


113 


Section  7.  Margins  on  grain  sold. 

The  Grain  Corporation  did  not  engage  in  business  primarily  for 
profits.  Its  original  purpose  was  to  expedite  the  administration  of 
the  food  control  laws.  By  the  terms  of  the  original  food  control  act 
of  August  10,  1917  "  the  President  is  authorized  from  time  to  time  to 
purchase,  to  store,  to  provide  storage  facilities  for  and  to  sell  for 
cash  at  reasonable  prices,  wheat,  flour,  meal,  beans,  and  potatoes." 
The  Executive  order  creating  the  Grain  Corporation  stated  that 
"  whereas  in  order  to  enable  the  United  States  Food  Administration 
acting  under  the  direction  of  the  President  to  efficiently  exercise  the 
authority  granted  by  said  act,  and  to  purchase,  store,  provide  storage 
facilities  for  and  to  sell  for  cash  at  reasonable  prices  the  commodities 
above  named,  and  to  enable  said  United  States  Food  Administration 
to  purchase  and  sell  such  commodities  in  the  manner  and  by  the 
methods  customarily  followed  in  the  trade,  it  is  expedient  and  neces- 
sary that  a  cori^oration  should  be  organized."  Later,  as  already 
stated,  when  a  guaranteed  price  was  established  for  wheat,  the 
Grain  Corporation  was  made  the  agent  of  the  Government  to  carry 
out  the  provisions  of  the  guaranty  and  directed  to  purchase  and  sell 
wheat  in  order  to  protect  the  Government  against  loss  growing  out 
of  the  guaranty. 

While,  as  stated  above,  the  primary  object  of  the  Grain  Corpora- 
tion was  not  to  make  profits,  a  margin  was  included  in  the  selling 
price  of  the  commodities  purchased,  which  in  the  ease  of  wheat  was 
1  per  cent  of  the  actual  cost,  including  the  purchase  price  plus  freight 
and  actual  handling  charges.  While  the  margins  were  usually  small 
they  were  sufficient,  together  with  other  income,  to  build  up  a 
surplus  of  over  $50,000,000  during  the  three  years  of  operations. 

The  following  table  shows  the  quantity  of  grains  sold,  the  net 
earnings,  and  the  margins  per  bushel  by  kind  of  grains  and  the 
margin  per  bushel  of  wheat  equivalent  on  flour : 

Table  55.— Quantity,  net  earnings,  and  mar  pin  per  iushel  far  the  Crrain  Cor- 
poration, hy  grains,  September  1,  1917,  to  February  28,  1921. 


Qrain. 


Sept.  1, 1917^uiie30, 1919. 


Quantity 
(bushels). 1 


Net  earnings. 


Margin 

per 
bushel. 


July  1, 1919-Feb.  28, 1921. 


Quantity 
(bushels).i 


Net  earnings. 


Margin 

per 
bushel. 


Wheat 
Flour  » 
Rye... 
Barley 
Corn . . 
Oats.. 


260, 587, 941 

217, 8.53, 059 

28,500,093 

10, 585, 671 

2, 153, 093 

21,004 


$10, 840, 559. 45 

11,094,465.92 

1,144,392.90 

695,103.15 

19, 274. 85 

803.87 


JO.  042 
.051 
.040 
.066 
.009 
.039 


147,230,353 

67,106,615 

649, 733 

2,720,330 


$3,805,639.50 

978,266.63 

147,367.87 

85, 471.  74 


$0,026 
.015 
.227 
.031 


I  Wheat  and  flour  quantities  from  Supplement  to  Grain  and  Flour  Statistics  During  the  War,  compiled 
by  A.  L.  Russell, statistician  of  United  Stales  Grain  Corporation. 
5  Barrels  reduced  to  wheat  equivalent  on  the  basis  of  4J  bushels  per  barrel. 

The  net  margin  per  bushel  on  wheat  from  the  beginning  of  opera- 
tions by  the  Grain  Corporation  up  to  June  30,  1919,  was  4.2  cents, 
while  the  margin  for  the  period  July  1,  1919  to  February  28,  1921, 
was  2.6  cents  per  bushel.  The  larger  margin  during  the  first  period 
was  due  in  part  to  the  purchase  of  a  large  quantity  of  Australian 


114  METHODS   AND   OPERATIOlSrS   OF   EXPORTERS. 

wheat  which  was  resohi  in  the  United  States  at  a  good  mar<^in  of 
profit.  The  margin  on  flour  sold  was  22.8  cents  per  barrel,  or  5.1 
cents  per  bushel  of  wheat  equivalent,  during  the  first  period  of  opera- 
tions; while- it  was  only  6.G  cents  per  barrel,  or  1.5  cents  per  bushel 
of  the  wheat  equivalent,  for  the  last  period.  The  corporation,  how- 
ever, received  an  average  price  of  $11.28  per  barrel  for  flour  sold 
from  July  1,  1918,  to  June  30,  1919,  while  the  average  was  only 
$10.45  per  barrel  from  July  1,  1919,  to  June  30,  1920.  The  margin 
on  barley  was  6.6  cents  per  bushel  for  the  first  period  and  only 
3.1  cents  for  the  last  period.  The  margins  on  corn  and  oats  sold 
during  the  first  period  were  0.9  of  a  cent  and  3.8  cents,  respectively, 
per  bushel,  while  neither  of  these  grains  were  sold  during  the  last 
period.  Rye  was  sold  on  a  net  margin  of  4  centr  per  bushel  during 
the  first  period.  During  the  last  period  the  margin  on  rye  was 
22.7  cents  per  bushel.  This  large  margin  was  due  to  the  fact  that 
the  entire  sales  were  from  stock  on  hand  at  the  beginning  of  the 
period,  which  were  carried  in  inventory  at  only  $1.50,  while  it  was 
sold  for  $1.97  per  bushel. 


APPENDIX  TABLES. 


Table  1. — Estimated  world  prodnctirm  of  icheat,  by  principal  producing  coun- 
tries, 1910-1921} 


[In  thousands  of  bushels.] 


United  States. 

Canada. 

Argentina. 

Australia. 

Year. 

Bushels. 

Per 

cent. 

Bushels. 

Per 
cent. 

Bushels. 

Per 
cent. 

Bushels. 

Per 

cent. 

1910 

635, 121 
621, 338 
730, 267 
76.3, 3S0 
891, 017 
1, 025,  SOI 
636,318 
636, 655 
921, 438 
968, 279 
833.027 
794, 893 

17.8 
17.5 
19.3 
18.5 
24.8 
24.9 
17.2 
31.7 
36.8 
3.5.3 
29.0 
26.6 

132,049 
230, 924 
221, 1.59 
231,717 
161,  2S0 
393,  543 
262,781 
233, 743 
189,075 
193, 260 
263, 189 
300,858 

3.7 
6.5 
5.9 
5.6 
4.5 
9.5 
7.1 

11.6 
7.6 
7.0 
9.2 

10.0 

131,010 
145, 981 
166. 190 
187, 391 
113,904 
169, 166 
172, 620 
80,115 
184, 000 
171,  591 
214, 143 
169, 756 

3.7 
4.1 
4.4 
4.5 
3.2 
4.1 
4.7 
4.0 
7.4 
6.3 

93. 263 

98, 109 

73, 894 

94,880 

106, 600 

25, 677 

184.709 

152, 433 

114, 734 

75,638 

1911 

2.6 

1912 

1913 

1.9 

1914 

1915 

3.0 

1916 

.6 

1917 

1918 

1919 

4.6 

1920 

1921 

5. 7  1        144, 191 

1.6 

Total 

9,4.57,534 

23.9 

2,gM,57S 

7.1 

1, 90.5, 867 

4.8  1     1,210,10}  ■          3.1 

Average 

788, 128 

234,715    158,822 

1        100,842  1 

British  India. 

Russia.' 

Other  countries. 

World. 

Year. 

Bushels. 

Per 
cent. 

Bushels. 

Per 

cent. 

Bu.shels. 

Per 

cent. 

Bushels. 

Per 
cent. 

Ibr^       

3.59, 6.54 
375,629 
,370.  .51 5 
362, 693 
312, 032 
376. 731 
323, 008 
282,069 
370, 421 
280,485 
377,888 
250, 469 

10.0 

10.6 

9.8 

8.8 

8.7 

9.1 

8.7 

14.1 

14.8 

10.2 

13.2 

8.4 

552, 067 
346, 372 
472, 390 
656,324 
833,639 
826, 784 

« 

(') 

(») 

(') 

(') 

15.4 
9.7 
12.4 
15.9 
23.2 
20.0 

1,671,891 
1,733.442 
1,754,536 
1,831,0,52 
1,167.444 
l,.30<i,983 
2, 121,  S97 
622,  .S71 
720, 971 
1,0.53,386 
1, 133. 641 
1,329.981 

46.8 
48.8 
46.3 
44.4 
32.6 
31.8 
57.3 
31.0 
28.8 
38.4 
39.5 
44.5 

3,  ,575, 0.55 
3, 551,  795 
3,791,951 
4, 127, 437 
3,  .585, 916 
4,127,685 
3,70I.3:}3 
2, 007,  .S,S6 
2, 500, 639 
2,  742,  639 
2, 867,  .S64 
2,9'.)0, 148 

100 

1911 

1912 

1913 

100 
100 
100 
100 
100 
100 
100 
100 
100 

1914 

1915 

1916 

1917 

1918 

1919 

1920 

1921 

*■''           1 

Total 

4, 041, 594 

10.2       3,687,576  |        9.3  |  16,451,095  | 

41.6 

39,570,348  |          100 

Average 

336, 799 

<614,596| 

1,370,841  1 

3,297,529  1 

}  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Jan.  28,  1922  (except  Cana- 
dian st.itistics,  1910-191S,  which  wore  taken  from  the  Canada  Yearbook,  1920.  and  the  year  1921,  which  was 
taken  from  Canadian  MonUily  Bulletin  of  Agricultural  Statisti&s,  January,  1922). 

'  European  Russia  (except  Poland  and  northern  Caucasia). 

'  Statistics  not  available. 

•  Average  for  six  years. 


106205°— 22- 


-10 


115 


116 


METHODS   AND   OPERATIONS   OF    EXPORTERS. 


Tari.k  2. — EstiiiKitcd  world  production  of  rye,  hy  principal  producing  countries, 

1i)  10-1921.' 
[In  thousands  of  bushels.] 


United  States. 

Germany. 

France. 

Spain. 

Year. 

Bushels. 

Per 

cent. 

Bushels. 

Per 

cent. 

Bushels. 

Per 

cent. 

Bushels. 

Per 
cent. 

1910 

.34,897 
33, 119 
35,664 
41,'-!81 
42, 799 
54,050 
48,862 
62,9.33 
91,041 
75,483 
60, 490 
57,918 

2.1 
2.1 
1.9 
2.2 
2.7 
3.4 
3.4 
13.7 
16.2 
11.8 
10.1 
7.5 

413,802 
427,776 
4.50,600 
481,169 
410,478 

:'60,:no 

350,486 
274,677 
315,301 
240, 122 
195,729 
260, 144 

24.7 
27.2 
24.2 
25.6 
2.5.6 
22.8 
24.5 
,59.  8 
,56.1 
37.6 
32.8 
33.7 

44,064 
45, 894 
48, 890 
49,452 
.32,002 
33,148 
33,351 
24,768 
28,935 
.30,577 
34,098 
44,494 

2.6 
2.9 
2.6 
2.6 
2.C 
2.1 
2.3 
5.4 
5.1 
4.8 
5.7 
5.8 

27,  .506 

28,  so 7 
18,867 
27,916 
23,9.50 
26,102 
28, 782 
24,3P5 
30,445 
23,296 
27,.8'0 
28,118 

1.7 

1911 

1.8 

1912     

1.0 

191'!       .                      

1.5 

1914 

1..5 

19l.'i 

1.6 

1916 

2.0 

1917                          

.5.3 

1918 

5.4 

1919 

3.6 

1920 

4.7 

1921 

3.6 

'I'nial 

638,637 

4.3 

4,186,594 

28.6 

449,673 

3.1 

316, 164 

2.2 

Average 

.53,220 

348,883 

37,473 

26,317 

ir. 

Russia. 

Other  countries. 

World. 

Ye 

Bushels. 

Per 

cent. 

Bushels. 

Per 

cent. 

Bushels. 

Per 

cent. 

1910                                       

750, 316 
642, 173 
908, 410 
872,711 
787, 625 
875,422 
843,740 

44.8 
40.8 
48.1 
46.4 
49.2 
55.3 
58.9 

402, 798 
396,074 
418,086 
407,758 
304,942 
234,274 
127,565 
72,613 
96,814 
269, 267 
278, 698 
381,105 

24.1 
35.2 
22.2 
21.7 
19.0 
14.8 
8.9 
15.8 
17.2 
42.2 
46.7 
49.4 

1,673,473 
1,573,933 
1,886,517 

1,880,  .387 

1,601,796 

1,583,3C6 

1,432,786 

4.59, 356 

562,  ,536 

638,745 

596,845 

771,779 

100 

1911                              

100 

1912 

100 

1()13.                       

100 

1914                                 

100 

1915                                                 

ICO 

1916                                 

100 

1917                                              

100 

1918                               

100 

1919                                          

100 

1920                            

100 

1921                                          

100 

Total 

5,680,397 

38.7 

3,389,994 

23.1 

14,661,459 

100 

3  811,485 

282, 500 

1,221,793 

1  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Jan.  28, 1922. 

2  Statistics  not  available. 

3  Average  for  7  j-ears. 

Table  3. — Estimated  wcrld  production  of  iarley,  hy  principal  producing  coun- 
tries, 1910-1921} 

[In  thousands  of  bushels.] 


United  States. 

Canada. 

Germany. 

Japan. 

Year. 

Bushels. 

Per  cent. 

Bushels. 

Percent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

1910 

173, 832 
160, 240 
223, 824 
178,189 
194,953 
228, 851 
182,309 
211,759 
256, 225 
147,008 
189,332 
151,181 

12.5 
11.7 
15.2 
10.8 
13.0 
15.8 
15.3 
22.7 
23.9 
15.2 
16.5 
15.6 

45,148 
44, 415 
49,  378 
48,319 
36, 201 
54,017 
42,  770 
55, 058 
77, 287 
56, 389 
63,311 
59, 709 

3.3 
3.2 
3.4 
2.9 
2.4 
3.7 
3.6 
5.9 
7.2 
5.8 
5.5 
6.2 

133, 330 
145,132 
159,924 
168,709 
144,125 
114,077 

89, 886 
103,720 
76, 695 
82,344 
89,056 

9.6 
10.6 
10.9 
10.2 
9.6 
7.9 

81,953 
86, 468 
90, 559 
101,477 
85,775 
94,959 
89, 366 
88, 896 
82, 650 
89,356 
92, 140 
89, 898 

5.9 

1911 

6.3 

1912     

6.2 

1913 

6.2 

1914     

5.7 

1915 

6.6 

1916 

7.5 

1917.!.!!!.!!!.! 

9.7 
9.7 
7.9 
7.2 
9.2 

9.5 

191S     

7.7 

1919 

9.2 

1920 

8.1 

1921 

9.3 

Total 

2, 298, 303 

15.2 

632, 002 

4.2 

1,306,998 

8.6 

1, 073, 497 

7.1 

Average. . 

191, 525 

52,667 

3  118,818 

89, 458 

APPENDIX  TABLES.  117 

Table  3. — Estimated  world  production  of  barley,  etc. — Continued. 


Year. 

Spain. 

United  Kingdom. 

Other  countries. 

World. 

Bushels. 

Per  cent. 

Bushels. 

Percent. 

Bushels. 

Percent. 

Bushels. 

Per  cent. 

1910    

76,308 
86,792 
59,994 
68, 772 
72, 272 
82, 763 
86,863 
76, 747 
90,496 
81,808 
90,462 
89, 320 

5.5 
6.3 
4.1 
4.2 

4.8 
5.7 
7.3 
8.2 
8.5 
8.4 
7.9 
9.2 

65,097 
59, 695 
60,112 
67,778 
■  66,637 
48, 376 
54,567 
59, 290 
62, 080 
57,  704 
65,688 
54,580 

4.7 
4.3 
4.1 
4.1 
4.4 
3.4 
4.6 
6.4 
5.8 
5.9 
5.7 
5.6 

813, 066 
790, 544 
823,186 
1,017,021 
904,560 
821,566 
733,  T59 
349,677 
397, 756 
4ti3, 376 
562, 200 
435, 170 

58.5 
57.6 
56.1 
61.6 
60.1 
56.9 
61.7 
37.6 
37.2 
47.6 
49.1 
44.9 

1,388,734 
1,373,286 
1,466,977 
1,650,265 
1,504,523 
1,444,609 
1,189,634 

931,313 
1,070,214 

972,936 
1,145,477 
1,068,914 

100 

1911 

100 
100 

1912    

1913 

100 
100 

1914        

1915 

lOo 
100 

1916 

1917 

1918 

100 

1919 

100 

1920            .   .   . 

100 

1921 

100 

Total 

962,597              6.4 

721, 604 

4.8 

8,111,881 

53.7 

15,206,882 

100 

Average 

80, 216 

60,134 

675,990 

1,258,907 

1  U.  S .  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Jan.  28, 1922. 
*  Statistics  not  available. 
'  Average  for  11  years. 

Table  4. — Estimated  tvorld  production  of  oats,  by  principal  producing  coun- 
tries, 1910-1921} 

[In  thousands  of  bushels.] 


Year. 

United  States. 

Germany. 

Canada. 

France. 

Bushels. 

Percent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

1910 

1,186,341 
922,298 
1.418,-337 
1,121,768 
1,141,060 
1,540,030 
1,251,8.37 
1,592,740 
1,538,124 
1,184,030 
1, 496, 281 
1, 060, 737 

28.3 
24.2 
30.7 
23.9 
28.2 
35.8 
35.9 
53.3 
49.4 
41.3 
42.3 
36.6 

544,287 
530, 764 
586,987 
669, 231 
622,674 
412,400 

249,  %4 
322,475 
309,587 
335, 521 
324, 880 

13.0 
13.9 
12.7 
14.3 
15.4 
9.5 

323,449 
365, 179 
391,629 
404,669 
313, 078 
464,954 
410,211 
403,010 
426,313 
394,  .387 
5.30, 710 
426, 233 

7.7 
9.6 
8.5 
8.6 
7.7 
10.8 
11.8 
13.5 
13.7 
13.8 
15.0 
14.7 

290,776 
303,  .328 
313,656 
311,157 
274,458 
238, 551 
277, 179 
214,259 
176,  .504 
179,  ^2.5 
291,406 
245,200 

7  0 

1911 

8  0 

1912  

6  8 

1913 

6  6 

1914        

6  8 

1915 

5  5 

1916     

8  0 

1917 

8.3 
10.3 
10.8 

9.5 
11.2 

7  2 

1918 

5  7 

1919 

6  3 

1920 

8  2 

1921 

8.4 

Total 

15,462,583 

34.7 

4,908,770            11.0 

4,853,822 

10.9 

3,116,305 

7.0 

Average. . 

1, 288, 549 

3  446, 252 

404,485 

259,692 

Year. 

United  Kingdom. 

Other  countries. 

World. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

1910 

191, 438 
177,164 
180, 20.6 
180,647 
180, 241 
184,092 
176, 049 
214,727 
257, 433 
219,316 
ISO, 872 
126, 908 

4.6 

4.7 
3.9 
3.8 
4.4 
4.3 
5.0 
7.2 
8.2 
7.7 
5.1 
4.4 

1,646,119 

1,509,828 

1,726,519 

2,009,965 

1,519,012 

1,472,130 

1,368,857 

313,245 

394,603 

.576,752 

702,090 

714,877 

39.4 
39.6 
37.4 
42.8 
37.5 
34.1 
39.3 
10.5 
12.7 
20.1 
19.9 
24.7 

4,182,410 
3,808,561 
4,617,394 
4,697,437 
4,050,523 
4,321,1.57 
3,484,133 
2,987,945 
3,115,452 
2,863,897 
3,536,880 
2,898,841 

100 

1911 

100 

1912 

100 

1913 

100 

1914 

100 

1915 

100 

1916 

100 

1917 

100 

1918 

100 

1919 

100 

1920 

100 

1921 

106 

Total 

2, 269, 153 

5.1 

13,953,997 

31.3 

44,564,630 

100 

Average 

189,096 

1,162,833 

3,713,719 



lU.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Apr.  15,  1922. 
*  Statistics  not  available. 
»  Average  for  11  years. 


118 


METHODS   AND   OPERATIONS  OF   EXPORTERS. 


Table  5. — Estimated  world  production  of  com,  by  principal  producing  countries, 

1910-1921.^ 

[In  thousands  of  bushels.l 


Year. 

United  States. 

Argentina. 

Hungary. 

Italy. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

1910 

2, 886, 260 
2,531,488 
3,124,746 
2,446,988 
2, 672, 804 
2,994,793 
2,566,927 
3,065,233 
2,502,665 
2, 811, 302 
3, 208, 584 
3,080,372 

71.6 
72.7 
71.4 
68.2 
69.6 
70.8 
77.9 
87.3 
80.0 
77.0 
77.6 
83.2 

175, 187 
27,675 
295, 849 
196,642 
263, 135 
338, 235 
161, 133 
58,839 
170,660 
240, 144 
258,690 
230,423 

4.3 

.8 
6.7 

5.5 
6.8 
8.0 
4.9 
1.7 
5.5 
6.6 
6.3 
6.2 

187,733 
137,423 
176,694 
176,694 
172,308 
180,550 

(?) 

(?) 

(») 

(?) 

50, 156 

27, 141 

4.7 
3.9 
4.0 
4.9 
4.5 
4.2 

101,722 

93,680 

98,668 

108,388 

104,966 

121,824 

81, 547 

82,771 

76, 590 

85,846 

89, 299 

94,484 

2.5 

1911 

2.7 

1912 

2.5 

1913 

.3.0 

1914 

2.7 

1915 

2.9 

1916 

2.5 

1917 

2.3 

1918 

2.4 

1919 

2.3 

1920 

1.2 

.7 

2.2 

1921 

2.6 

Total 

33, 892, 162 

75.3 

2,416,612 

5.4 

1,108,699 

2.5 

1, 139, 785 

2.5 

Average.. 

2,824,347 

201,384 

3 138, 587 

94,982 

Year. 

Rumania. 

British  India. 

Other  countries. 

World. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

Bushels. 

Per  cent. 

1910         .  .  . 

103,665 

110,712 
103, 921 
114,662 
102, 552 
86, 412 

(2) 
(^) 

137,412 
92, 952 
99,036 

2.6 
3.2 
2.3 
3.2 
2.7 
2.0 

(^) 
(') 
(^) 

87, 240 
83,360 
83,280 
100, OSO 
93, 760 
96,600 
71, 288 
98,760 
(2) 

577, 063 
580,029 
572,010 
456,815 
443,673 
426,686 
387, 490 
212,220 
282,918 
303, 823 
337, 247 
170, 101 

14.3 
16.7 
13.1 
12.8 
11.5 
10.1 
11.7 
6.0 
9.0 
8.3 
8.1 
4.6 

4,031,630 
3,481,007 
4,371,888 
3,-587,429 
3, 842, 798 
4,231,780 
3, 297, 177 
3, 512, 823 
3, 129, 433 
3,649,815 
4, 135, 688 
3,701,557 

100 

1911  

100 

1912 

100 

1913      

2.4 
2.2 
2.0 
3.0 
2.7 
3.1 
2.0 
2.4 

100 

1914 

100 

1915 

100 

1916 

100 

1917     

100 

1918 

100 

1919 

3.8 
2.2 
2.7 

100 

1920 

100 

1921  

100 

Total 

951, 324 

2.1 

714, 368 

1.6 

4,750,075 

10.6 

44,973,025 

100 

Average- 

<  105, 705 

3  89, 296 

395,840 

3,747,752 

. 

1  U.  S.  Department  of  Agriculture  Yearbooks,  1912-1920,  and  Crop  Reporter,  Jan.  28, 1922. 
'  Statistics  not  available. 
«  Avorage  for  8  years. 
<  Average  for  9  years. 

Table  6. — Exports,  imports,  and  net  exports  of  wheat  and  wheat  flour,  for  thf 
United  States,  calendar  years  1910-1921.^ 


[In  thousands  of  bushels.] 

Year. 

Exports. 

Imports. 

Net 

Domestic. 

Reexports. 

Total. 

exports. 

1910 

61,923 
83,330 
109, 452 
154, 760 
231,323 
276,406 
218, 755 
168, 864 
208, 857 
267,111 
307,623 
355,661 

2  132 

62, 055 
83,330 
109,519 
154, 864 
232, 141 
276, 801 
219, 034 
169,268 
210,410 
267,253 
307,685 
356,628 

996 

1,922 

3,052 

1,167 

2,069 

5,149 

9,407 

36,474 

17,788 

7,985 

39, 412 

27,633 

61  059 

1911 

81,408 

1912 

67 
104 
818 
395 
279 
404 
1,553 
142 

62 
967 

106  467 

1913 

153,697 

1914 

230,072 

1915 

271  652 

1916 

209, 627 

1917 

132, 794 

1918 

192, 622 

1919 

259,268 
268, 273 

1920 

1921 

328, 995 

Total 

2,444,065 

4,923 

2,448,988 

153,054 

2  295,934 

1  Monthly  Summary  of  Foreign  Commerce  of  the  United  States  Bureau  of  Foreign  and  Domestic  Com- 
merce.   Barrels  of  Hour  in  wheat  equivalent,  4J  bushels  per  barrel. 

2  Exports  of  imported  wheat  and  flour. 


APPENDIX   TABLES. 


119 


TxS.Br>K  7. — Exports  of  barley  and  rye,  including  the  flour  of  each,  for  the  United 
States,  calendar  years  1910-1921} 

[In  thousands  of  bushels.] 


Year. 

Barley. 

Rye. 

Year. 

Barley. 

Rye. 

1910 

8,263 

3,555 

8,195 

12,782 

18, 208 

26, 529 

51 

31 

501 

2,034 

8, 158 

13,655 

1916 

22,486 
17, 859 
20,764 
39,004 
17,854 
25,834 

15,838 
14  G89 

1911 

1917 

1912 

1918 

ic' 308 

1913 

1919 

40!494 
59  253 

1914 

1920 

1915 

1921 

3o'l46 

1  Monthly  Summary  of  Foreign  Commerce  of  the  United  States  Bureau  of  Foreign  and  Domestic  Com- 
merce. 

Table  8. — Exports,  imports,  and  net  exports  of  oats,  including  oatmeal  and 
rolled  oats,  for  the  United  States,  calendar  years  1910-1921} 

[In  thousands  of  bushels.] 


Year. 

Exports. 

Imports. 

Net 

Domestic. 

Reexports. 

Total. 

exports. 

1910 

2,833 

3,698 

31,296 

7,573 

36, 656 

108, 195 

105, 838 

113,614 

131,085 

67, 570 

16, 540 

8,715 

52 

9 

8 

4 

767 

184 

481 

2 

97 

2,885 

3,707 

31, 304 

7,577 

37,423 

108, 379 

106,319 

113,616 

131,182 

67,570 

16, 549 

8,984 

754 

100 

3,263 

13, 309 

9,429 

364 

586 

1,983 

1,444 

609 

6,728 

3,565 

2  131 

1911 

3  607 

1912 

28*041 

1913 

2  s'  732 

1914 

27*994 

1915 

108  015 

1916 

105'  733 

1917 

111  633 

1918 

129  738 

1919 

66  961 

1920 

9 
269 

9*821 

1921 

5;  419 

1  Monthly  Summary  of  Foreign  Commerce  of  the  United  States  Bureau  of  Foreign  and  Domestic 
Commerce. 

2  Excess  of  imports  over  exports. 


Table  9. — Imports,  exports,  and  net  exports  of  corn,  including  corn  meal,  for 
the  United  States,  calendar  years  1910-1921} 

[In  thousands  of  bushels.] 


Year. 

Exports. 

Imports. 

Net 

Domestic. 

Reexports. 

Total. 

exports. 

1910 

44,072 
63, 533 
32, 627 
46, 923 
17, 018 
50, 223 
55, 237 
57,011 
47, 059 
16, 002 
21, 230 
132,266 

44,072 
63, 533 
32,641 
^6,916 
17,010 
50,305 
55, 765 
57, 136 
47,118 
16,067 
22,172 
132,325 

44, 072 

1911 

11 
913 
5,005 
15, 821 
6,499 
2, 155 
1, 6.55 
1,990 
11,213 
7,785 
164 

63  522 

1912 

it 

23 
22 
82 
528 
125 
59 
65 
942 
59 

31,728 

1913 

41,941 

1914 

1,219 

1915 

43,806 
53,610 

1916 

1917 

55,481 
45,128 

1918 

1919 

4,854 

1920 

14,387 
132, 161 

1921 

'  Monthly  Summary  of  Foreign  Commerce  of  the  United  States  Bureau  of  Foreign  and  Domestic  Com- 
merce. 


120 


METHODS   AND   OPERATIONS   OF   EXPORTERS. 


Taij].k  10. — Domestic  exports  of  principal  (jrains  by  important  ports  or  customs 
districts,  calendar  years  1919-1921. 


Port  or  district. 


Wheat. 


1919. 

Galveston 

San  Antonio 

New  Orleans 

Baltimore 

Philadelphia 

New  York 

Boston 

Chicago 

Michigan 

Duluth  and  Superior 

San  Francisco 

Portland  and  Astoria,  Oreg. 

Seattle  and  Tacoma 

Other  ports 


Total . 


1920. 

Galveston 

San  Antonio 

New  Orleans 

Baltimore 

Philadelphia 

New  Yorlc ...  

Boston 

Chicago 

Michigan 

Duluth  and  Superior 

San  Francisco 

Portland  and  Astoria,  Oreg.. 

Seattle  and  Tacoma 

Other  ports 


Total. 


1921. 

Galveston : . 

San  Antonio 

New  Orleans 

Baltimore 

Philadelphia 

New  York 

Boston 

Chicago 

Michigan 

Duluth  and  Superior 

San  Francisco 

Portland  and  Astoria,  Oreg... 

Seattle  and  Tacoma 

Other  ports 


Total 280,057,601 


BiLshels. 

17,  .587, 960 

16, 0.58 

12,785,563 

2.5,501,321 

31,517,322 

39,131,060 

9,351,179 

489, 000 

122 

15 

207 

2, 520, 760 

3,984 

9,181,319 


148,086,470 


561,406 
77, 045 
695, 864 
798, 338 
684, 343 
148, 606 
174, 554 
278, 767 
262, 052 
405, 888 
5,715 
289, 790 
519,766 
3S5, 200 


218,287,334 


122, 075 
060, 170 
031, 709 
602, 542 
443, 926 
476, 576 
183, 160 
677, 072 
696, 935 
168, 200 
38, 407 
500, 263 
962, 273 
094, 293 


Rye. 


Bushels. 


300 

8,493,883 

8,69.5,885 

12, 435, 503 

9- 1,480 

243, 922 

255, 539 

1, 135, 000 


176 
1,726,478 


26, 898, 166 


496, 713 

562 

177, 857 

19, 679, 665 

2, 280, 992 

23, 488, 706 

333, 759 

525, 142 

345, 096 

7, 684, 589 


370 
2, 057, 037 


57,070,488 


1, 098, 501 

650 

1, 166, 361 

11,604,219 

1, 135, 125 

6, 007, 807 

347, 128 

1, 662, 570 

104, 467 

4,060,348 

32, 651 

7,399 

28,144 

2, 556, 351 


29,811,721 


Barley. 


Busheli. 
1,562,420 
69,  ,572 
6, 926, 738 
4, 062, 624 
2, 303,  565 
8, 334, 279 
2, 517, 290 


256, 982 

570, 028 

6, 134, 595 


13 

4, 873, 734 


37,611,840 


62,5,055 

85, 113 

5,949,073 

735, 758 

232, 538 

4, 947, 659 

45,112 


106,519 
"4,' 611,"  083 


93 
516, 224 


20, 933 

165, 760 

1,064,315 

1,433,517 

22, 303 


4, 400, 365 


89 

52, 000 

18, 366, 250 

223, 156 

78,410 

6,902 


25, 834, 000 


Corn. 


Bushels. 

3, 306 

103, 143 

1,2.33,081 

810, 699 

483, 649 

1,196,374 

1,761 

898  91] 

4,431,660 

560, 432 

5, 396 


Oats. 


60, 041 
1,404,080 


Bushels. 

.56, 180 

15, 2.33 

0,891,101 

6, 129, S95 

7, 649, 722 

26,641,915 

3,  524, 100 

120, 925 

2, 178, 188 

168, 203 

570 

26,086 

30, 034 

1,861,727 


Total. 


Bvshch. 

19, 200, 866 

20 1, 006 

27,  X36, 783 

38,  998, 422 

49,6.50,143 

87, 739, 731 

10,.m5,810 

1,746,7.58 

7,122,491 

2,433,678 

6,140,768 

2,546,846 

94, 848 

19,047,338 


11,186,533 


82, 229 

658,  .510 

1, 142, 998 

1,623,402 

700, 665 

1,653,372 

58, 854 

648, 749 

7, 800, 3S6 

357, 128 

2,106 


223, 327 
2, 809, 694 


17,761,420 


905, 620 
7, 820, 8.50 

13, 8.S3, 026 

19,  089,  922 
9,  796, 883 

12,429,805 
1,39,5,358 

35, 956, 341 

5, 974, 365 

1,318,747 

48,831 


336, 299 
19,118,458 


55,294,479  I  279,077,488 


1,500 
13, 339 

907, 06S 
1,884,718 

126, 160 

7,884,700 

85, 819 


1, 348, 795 

234 

48, 833 

21,221 

30, 716 

524, 771 


12, 877, 874 


25, 920 
23, 857 
543, 988 
145, 143 


317, 847 
419 


355, 107 

129 

5,531 

22, 061 

1, 505 

, 782, 638 


47, 766, 903 

834, 569 

56, 872, 860 

51,721,881 

21,024,698 

74,123,043 

4,698,098 

8, 452, 658 

9, 862, 848 

15, 447, 839 

4,667,737 

12,311,011 

3, 774, 272 

12, 292, 926 


323,851,343 


94, 173, 049 

9,071,287 
73, 689, 399 
48,775,343 
26, 398, 237 
41,232,035 

6, 326, 430 
50, 295, 983 

7, 130, 963 
12, 599, 424 
18,491,670 
37, 752, 879 

6,406,631 
35, 558, 642 


467, 901, 972 


1  Largely  from  Milwaukee,  Wis. 


I 


APPENDIX   TABLES. 


121 


Table  11. — Exports  of  wheat  by  kinds  and  principal  ports  of  shipmetit,  in  six- 
month  period,  July,  1920~December,  1921 — Continued. 

[In  thousands  of  bushels.] 


Hard  red  winter.       Solt  red  winter. 

Hard  red  spring. 

Mixed. 

Port  of  shipment. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  ceut. 

Bush- 
els. 

Per  cent. 

Of 
kind. 

Ofall 
kinds. 

Of 
kind. 

Ofall 
kinds. 

Of 
kind. 

OfaU 
kinds. 

Of 
kind. 

Ofall 
kinds. 

July-December,  1920. 
Portland,  Me 

279 

4.84 

48.95 

291 

667 

9,340 

3,317 

2,363 

123 

19, 734 

21,. 356 

0.42 

.96 

13.48 

4.79 

3.41 

.18 

28.49 

;50.84 

51  05 

1,051 

7,867 
3.107 
7,096 

325 

1.98 
14.81 

5.85 

13.36 

.61 

42.65 

665 

2.51 
18.36 
18.41 
41.94 
.68 
12.76 

4.64 

26.99 
17.21 
34.67 
51. 95 
28.66 
8.44 
3.32 

27.07 

New  York 

27.85   4,863 
22.09  4,877 
3:3.18  11.111 

4,ii5 

1,043 

125 

71.42 
18.10 
2.17 

14.57 
7.42 
.58 

33.06 

Philadelphia 

Baltimore 

2.3.58 
11.05 

Newport  News 

New  Orleans  .     .  . 

51.75 
41.37 
38.73 
100.00 
100.00 
8.02 

ISO 
3,381 
1,230 

19.59 

16,5651  31.18 
14,. 340:  26.99 

895!     1. 6F 

49.29 

57.70 

Texas  City 

Port  Arthur 

1,012 
1864 

1.91 
1.63 

Portland,  Oreg 

200 

3.47 

1.86 

1  9,  710 
2,366 

14.02 
3.41 

90  12 

185 

.70 

6.17 

78.95 

Total 

53,122 

100.00 

33.17 

26,492'l00.00 

i 

16.55 

5,762 

100.00 

3.60 

69,267100.00 

43.27 

January-June,  1921. 
Portland,  Me 

670 

15.51 

100.00 

Boston 

2 

253 

2,116 

3,496 

1,770 

152 

.0:3 

3.25 

27.17 

44.88 

22.72 

1.95 

100.00 

3.61 

26.53 

51.99 

5.62 

.38 

New  York 

806 

961 

509 

27, 68:5 

39,  307 

8,275 

1,471 

567 

1.01 

1.21 

.64 

34.79 

49.39 

10.40 

1.85 

.71 

11.50 
12.05 

7.57 
87.92 
99.24 
99.21 
100.00 

3.98 

698 

2,135 

445 

16.16 
49.43 
10.31 

9.96 
26.77 
6.62 

5,157 
2,6.54 
2,118 
1,983 
150 
66 

19.92 
10.25 
8.18 
7.66 
.58 
.26 

Philadelphia 

Baltimore 

33.28 
31.50 

New  Orleans 

6.30 

Galveston 

.38 

Texas  City 

.79 

Port  Arthur 

Portland,  Oreg 

349 
22 

8.08 
.51 

2.45 
3.53 

113,323 
419 

51.47 
1.62 

93.57 

Seattle  and  Tacoma 

67.26 

Total 

79,579 

100.00 

67.35 

7,789 

100.00 

6.59 

4,319 

100.00 

3.66 

2  25,884 

100.00 

21.90 

Fiscal  year  1921. 
Portland,  Me 

949 

9.41 

76.53 

291 

667 

14, 497 

5, 971 

4,481 

123 

21,7)7 

21,516 

66 

.31 

.70 

15.23 

6.27 

4.71 

.13 

22.83 

22.61 

.07 

23.47 

Boston. 

1,051 

8,673 

4,068 

7,605 

325 

44,248 

53, 647 

9,170 

2,48:3 

11,431 

.79 

6.51 

3.07 

5.73 

.24 

33. 34 

40.43 

6.91 

1.S7 

1.08 

42.62 
24.59 
18.46 
27.05 
51.75 
61.86 
70.00 
99.29 
100.00 
5.72 

667 
5,116 
6,993 
14, 607 

ISO 
5,151 
1,382 

i.95 
14.92 
20.40 
42.61 
.52 
15.03 

4.03 

27  05 

27.05 

New  York 

14.51 
31. 73 
51.96 
28.66 
7.20 
1.80 

4,813 

3,178 

570 

47.74 

31.53 

5.65 

13.65 
14.42 
2.03 

41.11 

Philadelphia 

Baltimore 

27.09 
1.5.94 

Newport  News 

19.  .59 

New  Orleans 

:'\36 

Galveston 

:  .08 

Texas  City 

.71 

Port  Arthur 

Portland,  Oreg 

549 
22 

5.45 
.22 

2.20 
.61 

123,0:53 
2,7&5 

24.21 
2.93 

92.08 

Seattle  and  Tacoma. 

185 

.54 

5.11 

76.93 

Total 

132,  701 

100.00 

47.69 

.34. 281 

100.00 

12.32 

10,  OSl 

100.00 

3.62 

2  95. 147 

100.00 

34.20 

July-December,  1921. 
Portland,  Me 

35 

359 

2,983 

685 

1,953 

39 

16,940 

35, 191 

4. 893 

2,1  SI 

865 

107 

0.05 

.54 

4.50 

1.04 

2.95 

.06 

25.58 

53.13 

7.39 

3.29 

1.31 

.16 

36.84 

100.00 

19.16 

4.48 

21.03 

20.42 

72.98 

98.64 

100.00 

100.00 

3.81 

2.10 

60 

0.56 

63.  IG 

Boston 

New  York 

1,486 
2,899 
6,164 

9.08 
17.71 
37.65 

9.55 
18.90 
66.38 

3,349 
7,247 

31.43 
68.01 

21.52 
47.40 

5,457 

3,151 

618 

15.10 
8.72 
1.71 

35.06 

Philadelphia 

Baltimore 

20.61 
6.66 

Newport  News 

New  Orleans 

5,530 
220 

33.77 
1.34 

23.83 
.62 

661 
264 

1.83 
.73 

2,85 

Galveston 

.74 

Texas  Citv 

Port  Arthur 

Portland,  Oreg 

21,303   58.94 
4,686|  12.97 

93.99 

Seattle  and  Tacoma. 

74 

.45 

1.45 

92.08 

Total 

66,231 

100.00 

49.24 

16,373 

100.00 

12.17 

10,656 

100.00 

7.92 

3  36, 143^100. 00 

26.87 

Calendar  year,  1921. 
Portland,  Me 

35 

359 

3,789 

1,646 

.02 

.25 

2.60 

1.13 

4.58 
99.45 
16.78 

7.07 

730 

4.87 

95.42 

Boston 

2 
1,739 
5,015 

.01 
7.20 
20.75 

.55 

7.70 

21.56 

New  York 

4,0-17 
9,382 

27.03 
62.65 

17.93 
40.33 

io.cii 

5,805 

17.11 
9.36 

47. 6i 

Philadelphia 

24.95 

1  Including  Astoria. 

'  Including  14,000  bushels  for  San  Francisco. 

•lucluding  3,000  bushels  for  San  Francisco. 


122 


METHODS   AND   OPEEATTONS   OF   EXPORTERS. 


Table  M.— Exports  of  itheat  hy  kinds  and  principal  ports  of  shipment,  in  six- 
month  period,  July,  1920-Dec.emher,  1!)21. 
[In  thousands  of  bushels.] 


Port  of  shipment. 


Calendar  year,  1921- 
Contmued. 

Baltimore 

Newport  News 

New  Orleans 

Galveston 

Texas  City 

Port  Arthur 

Portland,  Oreg 

Seattle  and  Tacoma 

Total 


Hard  red  winter. 


Bush- 
els. 


2,462 

39 

44,  (;23 

74,49S 

13,  K-.S 

3,  rr-,2 

1,432 
107 


145, 810 


Per  cent. 


Of      Of  aU 
kind,  kinds 


1.69 

.03 

30. 60 

51.09 

9.03 

2.51 

.98 

.07 


100.  00 


15. 3S 
20.42 
81.58 
98.96 
99.50 
100.00 
3.88 
1.87 


57.70 


Soft  red  winter. 


Bush- 
els. 


9,  OCO 


7,30(1 
372 


74 

24, 162 


Per  cent. 


39. 9S 


30.21 
1.54 


60. 34 


13.35 
.49 


100.00 


9.56 


Hard  red  spring. 


Bush- 
els. 


Per  cent. 


Of     Of  all 
kind,  kinds. 


2.97 


2.33 
.15 


100.  00 


2.78 


Mixed. 


Bush- 
els. 


2,736 


2,644 
414 


I  34, 626 
5, 105 


*  62, 027 


Per  cent. 


Of     Of  all 
kind,  kinds. 


4.2C 
.(■7 
.11 


55.82 
8.23 


100.00 


17.09 


4.83 
.55 
.50 


93.82 
89.37 


24.55 


Common  white. 

White  club. 

Durum. 

Total. 

Port  of  shipment. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  cent. 

Of 
kind. 

Of  all 
kinds. 

Of 
kind 

Of  all 
kinds. 

Of 
kind. 

OfaU 
kinds. 

Of 
kind 

Ofal 
kinds. 

July-December,  1020. 
Portland,  Me.. 

570 

2,464 

28, 252 

14, 066 

21,389 

628 

40,038 

37,029 

895 

1,012 

10, 774 

2.997 

0.36 

1.54 

17.64 

8.78 

13. 36 

.39 

25.01 

23.13 

.56 

.63 

6.73 

1.87 

100.00 

Boston 

81 
2,067 

1.77 
45.29 

3.29 
7.31 
12.24 
3.24 

100.00 

New  York 

100.00 

Pliiladelphia 

1,7221  37.73 

100.00 

Baltimore. 

694 

15.21 

100.00 

Newport  News. 

100.00 

New  Orleans 

96 
61 

31.89 
20.27 

0. 24 
.16 

262 
32 

43.96 
5.37 

0.66 

100.00 

Galveston..  . 

.09 

100.00 

Texas  City 

100.00 

Port  Arthur... 

100.00 

Portland,  Oreg... 

100.00 

Seattle  and  Tacoma 

144 

47.84 

4.80 

302 

50.67 

10.08 

100. 00 

Total 

301 

100.00 

.19 

596 

100.00 

.37I  4.564 

100. 00 

2.85 

160, 114 

100. 00 

100.00 

January-June,  1921. 
Portland,  Me 

670 

2 

7,011 

7,975 

6,724 

31,486 

39, 609 

8,341 

1,471 

14,2.39 

623 

.57 

"5.' 93 
6.75 
5.69 

26.65 

33.52 
7.06 
1.25 

12.05 
.53 

100.00 

Boston 

' 

100. 00 

New  York 

38 
16 

28.79 
12.12 

.54 
.20 

59 
93 
156 

19.16 
30.19 
50.65 

.84 
1.17 
2.32 

100.00 

Philadelphia 

Baltimore 

100.00 

100.00 

50 

37.88 

.16 

100.00 

Galveston 

100. 00 

Texas  City... 

100.00 

Port  Arthur 

100. 00 

Portland,  Oreg. 

100.00 

Seattle  and  Tacoma 

28   2i.2i 

4.49 

154 

100.00 

24.72 

100.00 

Total 

132 

100. 00 

.11 

154 

100. 00 

.13 

308 

100. 00 

.26 

2118,151 

100.00 

100.00 

Fiscal  year  19Z1. 
Portland,  Me 

1,240 

2,466 

35, 263 

22,041 

28, 113 

628 

71, 524 

76,638 

9,236 

2,483 

25,013 

3,620 

.45 

.89 

12.67 

7.92 

10.10 

.23 

25.70 

27.54 

3.32 

.89 

8.99 

1.30 

100.00 

Boston 

81 

2,126 

1,815 

850 

1.66 
43.64 
37. 25 
17.45 

3.2s 
6. 03 
8.  23 
3.02 

100.00 

New  York 

38 
16 

8.78 
3.69 

.11 
.07 

100.00 

Philadelphia 

Baltimore 

100.00 

100.00 

Newport  News.  .  .. 

100.00 

146 
61 

33.72 
14.09 

.21 
.08 

262 
32 

34.93 
4.27 

.37 
.04 

100.00 

100.00 

Texas  City 

100.00 

Port  Arthur 

100.00 

Portland,  Oreg 

100.00 

Seattle  and  Tacoma 

172 

39.72 

4.75 

456 

60.80 

12.60 

100.00 

Total 

433 

100.00 

.15 

750 

100.00 

.27 

4,872 

100.00 

1.75 

2  278,265 

100.00 

100.00 

'  iBcluding  Astoria. 


!  Including  14,000  bushels  for  San  Francisco. 
4  Including  17,000  bushels  for  San  Francisco. 


APPENDIX   TABLES. 


123 


Table  11. — Exports  of  wheat  hy  kinds  and  principal  ports  of  shipment,  in  six- 
month  period,  July,  1920-December,  1921 — Continued. 


Common  white. 

White  club. 

Durum. 

Total. 

Port  of  shipment. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  cent. 

Bush- 
els. 

Per  cent. 

Of 
kind. 

OfaU 
lands. 

Of 
kind. 

OfaU 
kinds. 

Of 
kind. 

Of  all 
kinds. 

Of 
kind. 

OfaU 
kinds. 

Jnly-Dccember,  1921. 
Portland,  Me 

95 

3.59 

15, 5'-5 

15,289 

9,280 

191 

23,211 

35, 675 

4,893 

2,181 

22,666 

2  5, 0S9 

0.07 

.27 

11.. 57 

11.37 

6.90 

.14 

17. 26 

26.52 

3.64 

1.62 
16.  So 

3.  78 

100.0 

Boston.        .... 

■ 

100.0 

2,290 

l,.3n7 

524 

1.52 

SO 

52.01 
20.02 
12.04 
3.49 

1.84 

14.71 

8.55 

5.64 

79.58 

.34 

100.0 

Philadelphia 

100.0 

27 

9.68 

0.29 

100.0 

100.0 

New  Orlaens 

100.0 



100.0 

Texas  City 

100.0 

Port  Arthur 

100.0 

Portland,  Oreg 

124 

128 

44.44 
45. 88 

.55 
2.52 

374 
94 

78.08 
19.62 

i.65 
1.85 

100.0 

100.0 

'    ' 

Total 

279 

100.00 

.21 

5  479 

100. 00 

.35 

4,  .353 

100. 00 

3.23 

5134,514 

100.00 

100.0 

Calendar  year,  1921. 
Portland,  Me    . 

765 

361 

22,  ,576 

23,264 

16,010 

191 

54,697 

75,284 

13, 234 

3,652 

36,905 

5,712 

.30 

.14 

8.93 

9.21 

6.34 

.07 

21. 65 

29.79 

5.24 

1.45 

14.61 

2.26 

100.0 

Boston.          

100.0 

New  York. 

318 

16 
27 

9.24 
3.89 
6.57 

.17 
.07 
.17 

2,349 
1,400 

680 
152 
80 

.50.  40 

30.04 

14.59 

3.26 

1.71 

10.41 
6.02 
4.24 

79.  .58 
.15 

100.0 

Philadelphia 

Baltimore 

100.0 

100.0 

Newport  News. . 

100.0 

New  Orleans 

50 

12.17 

.09 

100.0 

100.0 

Texas  Citv 

100.0 

Port  Arthur 

100.0 

Portland,  Oreg 

124 
156 

30.17 
37.  9R 

.34 
2.73 

374 

248 

59.08 
39.18 

1.01 
4.34 

100.0 

100.0 

Total 

411 

100.00 

.16 

6  633 

100.00 

.25 

4,661 

100.00 

1.84 

6  252,079 

100.00 

100.0 

Source  of  data— Grain  Standards  Division,  Bureau  of  Markets,  U.  S.  Department  of  Agriculttire. 

^Includine;  14,000  bushels  for  San  Francisco. 
6  Including  11,000  bushels  for  San  Francisco. 
» Including  28,000  bushels  for  San  Francisco. 

Table  12. — Estimated  production  of  wheat,  corn,  oats,  barley,  rye,  and  buck- 
wheat in  the  United  States,  calendar  years  1910-1921. 

[In  thousands  of  bushels.] 


Year. 

Wheat. 

Com. 

Oats. 

Barley. 

Rye. 

Buck- 
wheat. 

1910 

635,121 
621,338 
730, 267 
7&3,380 
891,017 
1,025,801 
636,318 
636, 655 
921,4.38 
968, 279 
833,027 
794, 893 

2,886,260 
2,531,488 
3,124,74(5 
2, 446, 988 
2,672,804 
2, 994, 793 
2,566,927 
3, 065, 233 
2,502,665 
2,811,302 
3,208,584 
3,080,372 

1,186,341 
922, 298 
1,418,-337 
1,121,768 
1,141,060 
1,549,0.30 
1,251,837 
1,592,740 
1,538,124 
1,184,030 
1,496,281 
1,060,737 

173, 832 

160, 240 
223, 824 
178,189 
194,9.53 
228,851 
182,309 
211,7.59 
256, 225 
147,608 
189,  .332 
151,181 

34,897 
.33,119 
35,664 
41,381 
42,779 
54, 050 
48,862 
62,0.33 
91,041 
75,  4S.3 
60, 490 
67,918 

17,  ,598 

1911        

17,  ,549 

1912 

19, 249 

1913 

13,8,33 

1914 

16,881 

1915  

15,056 

1916 

11,662 

1917  

16,022 

1918 

16.905 

1919  

14,  .399 

1920 

13,142 

1921 

14,079 

o 


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